EXHIBIT 10.2
Memorandum of Understanding between
chello broadband N.V. ("chello") and VTR GlobalCom, S.A. ("VTR")
1. The
"Territory" Every home and place of business connected to VTR's network
which currently meets network quality standards as well as
homes and businesses to be upgraded in accordance to the
upgrade schedule.
2. Term 7 years, automatically renewed in 3 year periods unless one
party notifies the other to the contrary 6 months prior to
the renewal date, subject to a shorter term if regulatory
requirements so mandate.
3. The "Services" Broadband IP services (excluding voice "IP Telephony" and
dial up internet) delivered by via VTR network to a PC or
internet access services delivered to a TV.
4. Exclusivity
obligations
of chello
and VTR chello will have exclusivity rights to offer the Service
through VTR's network across the Territory for the duration
of the term. VTR will be the sole exclusive provider of
chello within the Territory. In Chile, but outside the
Territory, chello will not, in an exclusive fashion, create
any agreement nor associate their brand with any other
company as long as VTR abides by its network upgrade plan.
chello will not provide services that compete within reason
of VTR's Telephony and Cable TV core businesses. VTR will
not undertake any service that competes within reason of
chello's broadband internet services. chello will have the
"right of last refusal" on a "most favored nations" status
for any new IP based service via VTR's network which is not
included in the definition of Services, including voice over
IP if such a service would not compete with VTR's cable
telephony offering. chello will have a right of first offer
within 30 days and last refusal within 90 days to provide
these services with VTR.
5. Franchising
Fees VTR will pay chello Franchise fees calculated in the
following manner:
o Residential access subscription fees, including rental
fees for customer premise equipment based on amounts
billed: 60% VTR, 40% chello. Non-premium business
access subscription fees, including rental fees for
customer premise equipment based on amounts billed: 60%
VTR, 40% chello. Fees for premium business access
services will be agreed between the parties as they are
introduced. End-use subscriptions access fees levels
shall be set by VTR, within the price ranges set
annually by chello, which cannot be lower than VTR's
costs unless mutually agreed.
o All other international fees (advertising, e-commerce,
etc.), regarding international content based on
revenues retained by chello: 10% VTR, 90% chello.
o Set-up fees, including installation of customer premise
equipment based on amounts billed: 90% VTR, 10% chello.
6. Local Content
Development Both parties agree to create a 50/50 JV, prior to launch of
business to develop local content for the Chilean portal to
be used to offer the Services. All this Content developed in
this JV will be offered on a "most favored nation" status to
chello broadband N.V. for use outside Chile.
7. Network Upgrade
Plan and Network
and Content
Quality Both parties commit to comply with Service Legal Agreement
("SLA") to be defined prior to launch of business. In case
of SLA breach, 90 days will be allowed within reason for
corrective measures by other party with an extension of 30
additional days for final rectification.
8. IP Backbone chello commits to offer initially 6 Mbps exclusive for Chile
as soon as VTR migrates 1500 subs to the Service. chello
commits to provide sufficient backbone capacity to ensure
high speed standards established in SLA at minimum 2 Kbps
per user.
9. IP End-to-End
Management chello intends reviewing the management of the IP layer from
head end to customer premises. chello will implement
end-to-end management if it is preferable for the delivery
of Services, on a basis to be agreed between the parties.
10. Customer Data VTR and chello will share all information which is needed to
offer the Services.
11. Billing VTR will send and collect bills. chello will send billing
data to VTR for integrating same into its billing system.
12. Customer Care VTR will establish an end-user help desk to answer questions
concerning relevant services and interface with chello's
technical support for technical questions it is unable to
answer. The SLA will provide further details regarding
Customer Care.
13. Customer
Acquisitions
and Retention chello will undertake Global and Regional sales and
marketing activities. VTR will undertake local and national
sales and marketing activities. chello commits to contribute
equal amounts that VTR spends on local and national
marketing to promote the Service subject to limits to be
agreed. chello will grant licensing to VTR to use chello
trade marks, service marks and logos. This licensing will be
restricted to activities that are approved by chello. All
materials prepared by VTR will conform to the "Brand Use
Guidelines" established by chello. The Services will be
associated with both VTR and chello brands.
14. Existing
Customers VTR will use "best effort" to migrate all existing customers
serviced by VTR from competitive services within 3 months of
signing the franchising agreement.
15. Local laws Terms of this MOU are subject to local Chilean laws which
supersede any term in case of discrepancy.
16. Launch of
Business chello commits to launch the Service in less than 120 days
from the signing of this MOU as long as the parties reach an
agreement on the SLA under reasonable assumptions. Business
launch considers Billing, IP Management and International
Backbone implementation, first phase Staffing, and Training
of content established in Chile.
For VTR GlobalCom, S.A. For chello broadband N.V.
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/s/ Xxxx Xxxxxxx /s/ Fares Xxxxxx
Date: February 22, 2000 Date: February 11, 2000
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For VTR GlobalCom, S.A.
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/s/ Xxxxx X. Xxxxxx, Xx.
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Date: February 11, 2000
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