Telecommunications upstart Williams Communications Group Inc. , which is developing a plan to restructure its balance sheet, said Wednesday it expects its first-quarter revenues to rise at least 20 percent, driven in part by higher sales to existing customers.

The Tulsa, Oklahoma-based spinoff from energy company Williams Cos. Inc. recently was warned by its banks that it may be in default on a credit pact. Williams has said it "strongly disagrees" with the banks' position, and it met its financial requirements for 2001.

"We do not believe we are in default and we will defend ourselves vigorously if that claim were to be made," Williams Chief Financial Officer Scott Schubert told analysts and reporters in a conference call Wednesday. "I expect I will continue to meet my covenants."

Williams reiterated it would submit to its lenders by Feb. 25 a plan to restructure its balance sheet. The company said it did not expect to seek bankruptcy court protection or substantially dilute the interests of its stockholders.

In the first quarter of 2002, Williams said it expects its revenues to be in the range of $328 million to $347 million. Wall Street analysts had expected the company's revenues to be $367.5 million, according to research firm Thomson Financial/First Call.

Williams said its quarterly network revenues would be in the range of $285 million and $300 million, up 20 percent from a year before, while emerging market revenues would range from $43 million to $47 million, up at least 6 percent from the year-earlier period.

For the quarter, it expects network cash flow, or earnings before interest, taxes, depreciation and amortization (EBITDA), to be between a $10 million loss and breakeven. Emerging markets EBITDA is expected to be a loss of between $9 million and $11 million.

Shares of Williams shed 1 cent, or 1.47 percent, to 67 cents a share on the New York Stock Exchange. The stock, already pressured by price wars and slack demand in the communications industry, has fallen 60 percent in the past two weeks following bankruptcy filings by rivals Global Crossing Ltd. and McLeodUSA Inc. Concerns about accounting practices at some carriers have also rocked the industry.

For the full year, Williams expects network revenues to grow 15 percent to 30 percent, and emerging market revenues to grow 25 percent to 40 percent. It said its full-year growth would be driven by increased traffic from existing customers, new customer growth and new products and services. Network EBITDA is expected to be positive on an operating basis for the year.

Capital spending in 2002 will be less than $100 million, it said.

Rating agencies Moody's Investors Service and Standard & Poor's recently cut Williams' debt rating. Moody's said weakness in the high-speed fiber optic network market would likely constrain Williams' revenue growth, while S&P expressed concern about the company's ability to fund its business beyond 2002.