ATN Aterian Plc

RNS Number:6723E
Atlantic Telecom Group PLC
5 June 2001



                                                    ATLANTIC TELECOM GROUP PLC

                ATLANTIC IN NEGOTIATIONS TO SELL INDIRECT RESIDENTIAL BUSINESS

                                      RESULTING IN SIGNIFICANT COST REDUCTIONS

                                                                   5 June 2001

 Atlantic Telecom Group PLC ('Atlantic') announces today, that further to its
statement of 22 January 2001 that it would no longer actively target new
residential customers, the Group has been investigating the sale or closure of
its indirectly connected residential business in the UK. The Board is now
engaged in exclusive negotiations with one party which it anticipates will
result in the sale of Atlantic's pre-paid and post-paid indirect residential
business. It is anticipated that the sale will be completed during the summer.

On 22 January, Atlantic announced a restructure which resulted in a redundancy
programme affecting 350 employees. The sale of the indirect residential
business is part of an ongoing programme which over the coming months will
result in a further reduction of up to 300 jobs in the UK. It is expected that
the Group will book restructure charges of approximately #5m in its accounts
to 31 March 2001.

The net effect of the changes announced today is expected to result in
approximately #35m savings over the next twelve months.

Graham J Duncan, Executive Chairman said: "Over the past few months, we have
taken a series of steps to align our operational cost-base with our
established strategy. Recently announced operating statistics clearly
demonstrate the effectiveness of these measures, with an improving proportion
of higher-spending directly connected business customers over the lower
revenue indirect residential services.

"Our indirect base is largely residential, and inherited from our acquisition
of First Telecom last year. While it currently accounts for a significant
proportion of the Group's revenue, continuing price pressure and support costs
would increasingly dilute the Group's overall margins.

"Atlantic is a niche operator, directly connecting business customers in the
UK, Germany and the Netherlands, where over 80% of our target market remains
in the hands of the incumbent operators. Our network build in these countries
has progressed ahead of schedule and is approaching completion. The cost
reduction measures announced today and on 22 January, coupled with the near
completion of our networks, will have a beneficial impact on cash flows going
forward.

"The company will engage in consultation with all affected staff, and we are
putting in place measures to provide employees with as much support and
assistance in securing alternative employment as possible."

For further information, please contact:
Graham J Duncan, Executive Chairman, Atlantic Telecom    020 7638 9571 (today
                                                         only)

                                                         01224 454 000
                                                         (thereafter)

Susy Atkinson, Director of Corporate Affairs, Atlantic   0141 403 4747
Telecom

Patrick Toyne Sewell / Sara Batchelor, Citigate Dewe     020 7638 9571
Rogerson

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