The cost of long distance telephone calls in Bermuda could be slashed because TeleBermuda's parent company GlobeNet has been sold for $1 billion to an American cable giant.

TeleBermuda's General Manager and Senior Vice President James Fitzgerald said yesterday that his company would continue, under the new owners, to be dedicated to reducing the cost of calls in Bermuda.

He added that if everything went to plan, long distance calls to the United States would be cut by 50 percent by 2001, from 49 cents to just 30 cents a minute.

Yesterday Worldwide Fiber announced it was buying GlobeNet, which is headquartered in the former US Naval Base in St. David's, subject to shareholder approval.

"This is a good deal for GlobeNet, a good deal for TeleBermuda and a good deal for the people of Bermuda,'' said Mr. Fitzgerald.

"Since TeleBermuda was set up in April 1997, the cost of long distance calls has fallen by 58 percent. We are totally committed to broadening our range of services and be the price leader on the Island. With Worldwide Fiber we will continue to do this.'' He added that as Worldwide Fiber, a world leader in telecommunications who are currently joining in the race to be the first to lay underwater cable to link the continents, the company would through their networks ultimately provide cheaper calls.

"We want to bring the cost of calls down and we will certainly do that with Worldwide Fiber,'' said Mr. Fitzgerald.

"We will still be offering long distance products, potentially at lower prices.'' Worldwide Fiber, which is about to change its name to 360networks, will now take on GlobeNet's Atlantica 1 scheme to link by fibre optic cable the US with Latin America via Bermuda. It will also be taking on the project of building links across the Pacific Ocean.

The GlobeNet and TeleBermuda centre in the former US Military base in St.

David's will continue on the site.

Trading of GlobeNet was suspended on the Bermuda Stock Exchange yesterday while the deal was being sealed, but will resume today.

GlobeNet, which provides high capacity network services for telecommunications, operates an undersea network which links the United States and Bermuda, and is currently building its link to Venezuela and Brazil.

The Worldwide Fiber will acquire the GlobeNet for approximately $600 million of Worldwide's common stock.

The total transaction is valued at about $1 billion as Worldwide Fiber will also assume GlobeNet's $400 million of debt.

"GlobeNet leads in the race to provide broadband capacity on an advanced network between North and South America,'' said Greg Maffei, chief executive officer of Worldwide Fiber.

"We expect the merged businesses to be the first telecom company to provide facilities-based connectivity between Americas and Europe.'' Jorge Escalona, president and chief executive officer of GlobeNet welcomed the merger.

"We are delighted to join a technology leader like Worldwide Fiber. This is a key step in enabling a seamless global network for high-capacity network and value added services.'' GlobeNet shareholders will receive a minimum of US $32.87 per share in Worldwide Fiber's common stock. Based on projections, this will mean that GlobeNet shareholders will own about 5 percent of Worldwide Fiber. Worldwide Fiber plans to offer its common stock to the public in an underwriting in the second quarter of this year.

More than 75 percent of GlobeNet shareholders have already agreed to the sale.

Both companies believe that the transaction will be finalised by the second half of this year.

Jorge Escalona James Fitzgerald