Ricochet gets $600M investment from MCI, Vulcan

Rohit Khare (rohit@uci.edu)
Tue, 22 Jun 1999 17:19:37 -0700

[I guess we know what MCI did with its wireless kitty when the Nextel=20
deal went nowhere (and MS stepped in with $600M there)... still, only=20
$350m in wholesale resale of Ricochet? a low lower bound -- if they=20
roll out 128kbps, they have a genuine leg up on the whole market. I'd=20
pay up to $50/mo for that service... MetriMunchkins? Maybe one real=20
selling point will be ultra-compatibility: that like a leech, a=20
munchkin can latch on to ANY airlink protocol to squeeze its data=20
through. A data-dongle tribble... Rohit]

Metricom Secures $600 Million Investment from MCI WorldCom and Vulcan=20
Ventures, Inc. to Fund National Wireless Data Network Expansion

Los Gatos, California - June 21, 1999 - Metricom, Inc.=20
(NASDAQ: MCOM), a leading provider of mobile data networking and=20
technology, today announced $600 million in funding from Vulcan=20
Ventures, Inc. and MCI WorldCom, each providing $300 million, to fund=20
national rollout of its Ricochet 128 kbps mobile data service. The=20
first wave of commercial availability is scheduled for mid-2000. In=20
addition, MCI WorldCom and Metricom have entered into a strategic=20
relationship, which includes national distribution of

Under the terms of the deal, MCI WorldCom and Vulcan Ventures, Inc.=20
will purchase 60 million new convertible preferred shares of Metricom=20
stock, priced at $10 per share. When consummated, and following an=20
allowed conversion from preferred to common, the breakdown of=20
ownership will include Vulcan Ventures, Inc. at 49 percent, MCI=20
WorldCom at 38 percent, with the remaining 13 percent ownership held=20
by other current public shareholders. The transaction is subject to=20
certain conditions, including Metricom shareholder approval. Metricom=20
will remain a publicly traded company headed by CEO Timothy A.=20
Dreisbach. The investment underscores Vulcan Venture Inc.'s ongoing=20
endorsement of Metricom and the Ricochet technology.

Included in the strategic agreement, MCI WorldCom has signed a=20
five-year, non-exclusive wholesale agreement valued at $350 million=20
with Metricom for its Ricochet services. Metricom will utilize MCI=20
WorldCom's high-speed data and Internet network and support=20
operations as it expands nationally. Metricom will also enlist=20
additional distribution channels for Ricochet, and embark on a=20
multi-million dollar branding and marketing campaign to raise=20
awareness and advance adoption of the service among the target market=20
of mobile professionals.

"Our ultimate goal is to allow mobile professionals to take their=20
full desktop functionality anywhere they need to work," said=20
Dreisbach. "This means accessing data and applications on corporate=20
LANs and the Internet anywhere in the same fashion as sitting in an=20
office. By teaming with Vulcan Ventures, Inc. and a strategic partner=20
with the national presence and reputation of MCI WorldCom, we gain=20
the resources and expertise to accelerate the availability and=20
adoption of our Ricochet service on a nationwide basis."

Metricom targets multiple segments within the overall mobile worker=20
marketplace. One of these segments includes the mobile professional=20
"road warriors" who travel extensively for their jobs. In a recent=20
study, International Data Corporation (IDC) predicted by 2001 that=20
7.3 million of the professionals in this segment, who carry=20
cellular/PCS phones, laptops and other mobile computing devices, do=20
business within the metropolitan areas included on Metricom's rollout=20
plan. "The mobile professional market available to Metricom is=20
forecast to exceed 13 million users in 2005," said Iain Gillott, vice=20
president, Worldwide Consumer & Small Business Telecommunications at=20
IDC. "Critical success factors in this segment of the mobile data=20
market are the ability to provide cost effective, reliable mobile=20
Internet and LAN access throughout the major metropolitan areas."

In addition to the primary business user market, Ricochet addresses=20
the high bandwidth data access requirements of residential users that=20
may not have viable ISDN, cable or DSL alternatives.

Unlike technologies just now evolving to solve growing=20
high-performance high-speed wireless data requirements, Ricochet is a=20
proven technology that leads the industry today at 28.8 kbps.=20
Building on Ricochet's success, Metricom has been testing 128 kbps=20
service and expects to launch the higher speed service in mid-2000 in=20
the following metropolitan areas: Atlanta, Baltimore, Chicago,=20
Dallas, Houston, Los Angeles, Phoenix, San Diego, San Francisco,=20
Seattle, New York, Washington, DC. Current rollout plans call for a=20
total of 46 metropolitan areas to gain Ricochet coverage by mid-2001.

"We have been impressed with the management, focus, and technology=20
advancement made by Metricom over the past year," said William D.=20
Savoy, President, Vulcan Ventures, Inc. "By adding a world-class=20
partner like MCI WorldCom, we expect to accelerate the availability=20
and adoption of Ricochet by mobile professionals who want fully=20
functional access to applications and data on LANs, Intranets and the=20
Internet anywhere, anytime."

Ricochet is uniquely positioned to capture a significant share of the=20
growing mobile professional market with the fastest data speeds,=20
"always-on" connections, flat-rate "all-you-can-use" pricing, no=20
metered roaming fees, and true mobility at 70 mph. These benefits are=20
a result of the Ricochet architecture, which is based on a digital=20
packet-switched network employing spread-spectrum radio frequency=20
transmission and standard Internet protocol (IP). Ricochet was=20
designed from inception for packet data, which means high throughput,=20
extremely low Bit Error Rate (BER), instantaneous handoff, and low=20
cost per connection.

About Metricom Metricom, Inc. is a leading provider of mobile data=20
networking and technology. The Company's Ricochet service provides=20
mobile professionals with high-performance, cost-effective untethered=20
access to the Internet, private Intranets, local-area networks,=20
e-mail, and other online services. Ricochet is generally available in=20
the greater San Francisco Bay Area, Seattle, and Washington, D.C.=20
metropolitan areas; in select areas of New York City; on corporate=20
campuses; and at gate areas at major airports throughout the United=20
States. For more information, call 1-800 Go-Wireless, or visit=20
Metricom's Web site at http://www.metricom.com.

About MCI Worldcom MCI WorldCom is a global leader in communications=20
services with 1998 revenues of more than $30 billion and established=20
operations in over 65 countries encompassing the Americas, Europe and=20
the Asia-Pacific regions. MCI WorldCom is a premier provider of=20
facilities-based and fully integrated local, long distance,=20
international and Internet services. MCI WorldCom's global networks,=20
including its state-of-the-art pan-European network and transoceanic=20
cable systems, provide end-to-end high-capacity connectivity to more=20
than 40,000 buildings worldwide. MCI WorldCom is traded on NASDAQ=20
under WCOM. For more information on MCI WorldCom, visit the World=20
Wide Web at http://www.wcom.com.

About Vulcan Ventures Inc. Vulcan Ventures Inc. of Bellevue,=20
Washington was founded by Paul G. Allen in 1986 to research and=20
implement his investments. Allen's investments through Vulcan=20
Ventures, Inc.are long-term, as his goals enable him to take=20
above-average risks and a long-term view. Through Vulcan Ventures,=20
Allen invests in companies which offer products, services or=20
technologies that fit his wired world strategy, and can contribute to=20
or benefit from the technology and strategy of other Paul Allen=20

Metricom and Ricochet are registered trademarks of Metricom, Inc. All=20
other trademarks are the property of their respective owners. This=20
press release may contain forward-looking statements. These=20
forward-looking statements are subject to risks and uncertainties.=20
Actual results may differ materially from such forward-looking=20
statements as a result of risks and uncertainties, including those=20
described in Metricom's 1998 Form 10-K and other reports filed with=20
the Securities and Exchange Commission.

=A9 1999 MCIWORLDCOM, Inc. All Rights Reserved. Legal & Privacy Notices