GTE to sell all 58,723 customer access lines in Nebraska to Citizens Utilities for $204 million

Editor's Note: Maps of the affected exchanges can be obtained by selecting Nebraska Maps .

IRVING, Texas - GTE Network Services has agreed to sell all of its 58,723 customer access lines (YE'98) in Nebraska to Citizens Utilities Corporation, a Stamford, Conn.-based telecommunications service provider for $204 million.

The transaction involves 37 telephone exchanges and 72 GTE Network Services employees. Earlier this year, Citizens agreed to purchase 186,839 customer access lines from GTE in Arizona, California, and Minnesota.

This is the most recent agreement in GTE's previously announced initiative to sell approximately 1.6 million telephone lines in the United States. To date, GTE has agreements to sell about 1.4 million access lines in 11 states.

Citizens currently operates all-digital, local exchange properties serving approximately one million access lines in 13 states: Arizona, California, Idaho, Montana, Nevada, New Mexico, New York, Oregon, Pennsylvania, Tennessee, Utah, West Virginia, and Wisconsin. Citizens also owns 83 percent of Electric Lightwave, Inc., a leading full-service, facilities-based integrated communications services provider of enhanced data service, frame relay, ATM and Internet access solutions to bandwidth intensive businesses and the growing e-commerce market.

"We are pleased to reach agreement with Citizens Utilities for these wireline properties in Nebraska," said John Appel, president-GTE Network Services. "This deal brings us another step closer to our strategic goal of raising more than $4 billion in after-tax proceeds from GTE's overall property sales initiatives. And, importantly, the transaction includes provisions for the fair and equitable treatment of the affected GTE employees in Nebraska."

Proceeds from the sale of GTE wireline properties - as well as GTE Airfone and GTE Government Systems - will be used for investment in other strategic initiatives, including GTE's recent purchase of Ameritech wireless properties in Illinois and Missouri.

The deals do not affect GTE's offering of long distance and Internet services to customers in Nebraska. Current directory publishing agreements will continue at least until December 31, 2001. In addition, current rates will remain in effect, but may be subject to review by state and federal agencies after the closing of the transaction.

In addition to the previous agreement with Citizens, since May, GTE has reached agreements to sell:

The GTE-Citizens transaction requires approval from the Nebraska Public Service Commission, the Federal Communications Commission, and the U.S. Department of Justice. The closing of the sale and transfer of operations to Citizens is expected to be completed by mid-2000.

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About GTE

With 1998 revenues of more than $25 billion, GTE is a leading telecommunications provider with one of the industry's broadest arrays of products and services. In the United States, GTE provides local service in 28 states and wireless service in 17 states, as well as nationwide long-distance, directory, and internetworking services ranging from dial-up Internet access for residential and small-business consumers to Web-based applications for Fortune 500 companies. Outside the United States, the company serves customers on five continents.