The decline, primarily reflecting the expected loss of revenue from clients using the AUCS platform, masks a 20% increase in consulting, integration and provisioning revenue from clients using Infonet's core services.
The AUCS outsourcing contract contributed $11 million to revenue and $3 million to EBITDA in the second quarter of fiscal year 2003.
We have migrated 229 customers onto the Infonet platform as a result of the AUCS contract," said Mr.
Nevertheless, we expect core revenue, including the AUCS incentive fee, to result in strong growth over last fiscal year.
In addition, we expect to transition approximately 200 former AUCS clients to the Infonet network.
The accuracy of our forward-looking statements will also be affected by the ongoing work Infonet is doing in connection with AUCS and the results of the final audit, strength of the market for Infonet products and services, competition, the timely transitioning of new business opportunities to Infonet's network and the effect of currency fluctuation.
Collazo said that he expects more than $25 million of AUCS
platform-related (previously booked as other communications services) revenue to transition into core revenue during the second half of the year.
In addition, we expect to continue to convert clients from the AUCS
platform to the Infonet platform until the AUCS
Collazo, Chairman, President and CEO of Infonet, said, "As we wind down the AUCS business and move toward the contract termination date - September 30, 2002 - the strength of our core business will become clearer.
Collazo noted that the AUCS contract has contributed more than $100 million in EBITDA over the three-year term of the contract, representing a strong return on Infonet's investment.
Declining AUCS revenue continued to adversely affect EBITDA growth during the third quarter.
The individual defendants knew that disclosure of these problems with its AUCS
business would devastate Infonet's chances of going public which allowed Infonet to raise $1.