Wednesday October 24, 12:01 pm Eastern Time

Company Press Release

North American DataCom Announces Revised Business Plan

IUKA, Miss.--(BUSINESS WIRE)--Oct. 24, 2001--North American DataCom, Inc. (OTC BB: NADA) announced today that it had approved a revised Business Plan. The revised plan is focusing on immediate revenue growth and immediate reduction of investment and expenses associated with delayed broadband infrastructure development.

"Our goal continues to be development of a state-of-the-art broadband network in the underserved southeast,'' stated Robert R. Crawford, chief executive officer of North American DataCom. "We are now faced with the realities of the current capital marketplace that have limited our access to funds for the investment. The Company has therefore redirected its focus to shorter-term goals. As discussed in previous releases, the Company's initial marketing efforts are to start application services, such as Global PTX, and to expand data storage (EDS) services and broadband services throughout the rural South. These three markets provide tremendous opportunities for immediate revenue growth. Our current broadband facilities of approximately 500 megabytes per second can support our application services until our network is in place.''

"This Plan that had been formulated last year with Cap Gemini Ernst and Young, calls for the construction of a 3,000-mile fiber optic network throughout the Southeast United States. The Company has divided the proposed fiber optic network construction into six discreet segments. The Company now plans to complete the first segment (roughly 550 route miles, extending from Atlanta to Memphis) by late 2002. The original 5-year Plan identified a $700 million capital investment for seven EDS centers, plus the 3,000-route-mile broadband network. The current market pricing has reduced the estimated capital investment to under $400 million. Revenues at the end of 5 years were projected to be over $500 million.

To accomplish our objectives in the current economic environment, we are developing our EDS capabilities and our application services,'' said Mr. Crawford. ``Segment 1, running from Memphis to our facility in Iuka, Mississippi, and on to Atlanta, is tactically and strategically the most important phase. We estimate completion of this by the end of next year, subject to the viability of the capital markets.'' The Company sees a large opportunity for its broadband services in this region. This region serves 15 of the 62 smaller population centers and 3 of the major 7 population centers along the planned network route. NAD plans to initially operate 2 of its 5 satellite data storage centers that are directly connected to its broadband network. The Company has opened approximately 5,000 square feet in its Major Data Center. The Major Center will eventually comprise 60,000 of the planned 125,000 square feet available in the Company's facility in Iuka, Mississippi.

The capital budget to develop and operate the interim bandwidth network, the interim EDS business and the Global PTX business is estimated at approximately $20 million over the next 12 months. The Company's Revised Business Plan continues to project operating cash flow to be breakeven by the end of this fiscal year, June 30, 2002. The revenues and net income in the next fiscal year are estimated at approximately $60 million and $10 million, respectively. "We remain determined to develop the network and services in the rural South, an underserved area,'' continued Mr. Crawford. "Further, we believe this Plan positions us to benefit from expanding traffic growth. We expect the capital market to react favorably to our Plan, and plan to utilize the equity line of credit announced earlier this year.''

Under the revised Plan, North American DataCom still expects to have a positive cash flow by June 2002, and profits in August 2002. The Company's first quarter results, scheduled for release next week, are expected to show raising revenues and reduced expenses.

Safe Harbor Statement

Statements in this release express management's beliefs and expectations regarding future performance. These statements are forward-looking and involve risk and uncertainties. These risks include, but not limited to, the ability to negotiate venture agreements, properly identify acquisition partners, manage and integrate acquired businesses, react to quarterly fluctuation in results, raise working capital and secure other financing, respond to competition and other rapidly expanding technology, deal with market and stock price fluctuation, and other risks. These risks are and will be detailed, from time to time, in North American DataCom, Inc. Securities and Exchange Commission filings. Actual results may differ materially from management's expectations.

North American DataCom's principal executive offices are located at 751 County Road 989, Building 1000, Iuka, MS 38852. For further information, contact Investor Relations, 662-424-5030, or by e-mail at


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