ATN Aterian Plc

RNS Number:9943H
Atlantic Telecom Group PLC
3 August 2001



           ATLANTIC SELLS INDIRECT RESIDENTIAL BUSINESS TO AFFINITY

                                                                 3 August 2001

Atlantic Telecom Group PLC ('Atlantic' or the 'Company') announces today the
sale of its UK indirect residential telephony business to Affinity Wireless
Ltd ('Affinity'), a wholly owned subsidiary of Affinity Internet Holdings PLC
for #1.8 million cash, which will be used to fund Atlantic's core SME
strategy.

Under the terms of the conditional agreement, 25% of the total consideration
(#450,000) is payable immediately, with the balance of payment deferred until
8th August, receipt of which is an essential condition of the agreement.

Atlantic will continue to carry the telecommunications traffic on its networks
from its former customer base, as well as from new customers that Affinity
attracts to the services, under a wholesale arrangement, resulting in
anticipated revenues to Atlantic of approximately #16 million over the next 12
months.

Under the agreement, Atlantic has been contracted to provide back-office
support for the business transferred to Affinity during a three-month
transition period, for which it will be paid a commercial rate. As part of the
transaction, Affinity's joint venture Hurricaneseye has entered into a
reseller agreement with Atlantic and will assume billing responsibilities for
the acquired base at the end of the transition period. Affinity aims to extend
the range of services to its newly acquired customers through tailored
packages including mobile phone and Internet access.

The assets of the business include the customer base, ownership of indirect
access numbers and associated hardware and applications software, and had a
net book value of #1.2 million at 31st March 2001. The business transferred to
Affinity recorded an EBITDA loss of #8.9 million in the year to 31st March
2001.

Graham J Duncan, Executive Chairman of Atlantic said: "I am delighted that we
have negotiated a transaction which is so positive for both parties. Atlantic
now has a valued customer in Affinity, and will continue to carry traffic from
the customer base on a wholesale basis.

"As well as retaining a significant proportion of the current revenue stream,
Atlantic will reap the benefits of our previously announced cost savings,
ensuring that this traffic makes a positive financial contribution to
Atlantic.

"Our recently announced operating statistics clearly demonstrated the
effectiveness of our focus on SME customers, and the sale of our residential
indirect customer base will allow us to concentrate even more fully on our
core business."

                                     ends

For further information, please contact:
Susy Atkinson, Director of Corporate Affairs, Atlantic           0141 403 4747
Graham J Duncan, Executive Chairman, Atlantic                    01224 454000
Patrick Toyne Sewell/Sara Batchelor, Citigate Dewe Rogerson      020 7638 9571

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