Re Agreement
09 January 2001 - 7:29AM
UK Regulatory
RNS Number:8930W
Flag Telecom Holdings Ld
9 January 2001
Contacts
Level 3 FLAG Telecom
Samantha English Jane Windsor
+852 2201 8026 +44 20 7317 0811
samantha.english@level3.com jwindsor@flagtelecom.com
Cannis Wong Catherine Nash (investor Relations)
+852 2201 8016 +44 20 7317 0894
cannis.wong@level3.com cnash@flagtelecom.com
Robin Miller (investor Relations)
+1 720 888 2518
robin. miller@level3.com
FLAG TELECOM AND LEVEL 3 ENTER AGREEMENT ON
PAN-ASIA SUBMARINE CABLE SYSTEM
Submarine Cable set to be Region's First Multi-Terabit System
London and Hong Kong, 9 January 2001 - Level 3 Communications, Inc. (Nasdaq:
LVLT), a global broadband infrastructure company, and FLAG Telecom (Nasdaq:
FTHL; LSE: FTL), a leading independent global carriers' carrier and
network services provider, today announced an agreement for a new
multi-terabit intra-Asia submarine cable system. The six-fibre pair system is
designed to offer intra-regional, city-to-city connectivity between the high
traffic centres of Hong Kong, Seoul, Tokyo, and Taipei.
Level 3's existing North Asian cable system, which is currently under
development, will form the Eastern leg of the new system connecting Hong Kong,
Taiwan and Japan. FLAG Telecom will develop the Western leg, connecting Hong
Kong, Korea and Japan. The first link of the system, between Hong Kong and
Japan, is expected to enter service in the second quarter of 2001. FLAG Telecom
will be responsible for the integration of the Eastern and Western links of the
system. The whole system will be over 10,000 kilometres in length and will be
managed and operated by FLAG Telecom.
Level 3 will have three fibre pairs on the system which will be referred
to as "Tiger". FLAG Telecom's three fibre pairs on the new system will be
branded as FNAL (FLAG North Asian Loop). Total cost of the entire system
is estimated to be approximately US$900 million.
Ed McCormack COO, FLAG Telecom, said: "This agreement with Level 3 marks
another major step in our strategy to develop a low-cost, scaleable global
IP network to support our expanding Network Services business. The
development of a North Asian loop has been an important part of our
network expansion plan and we now expect to have terabit connectivity
between major Asian cities in a substantially shortened time period and, we
believe, significantly ahead of our competition. We also gain a
significant and highly-respected market player on the system. FNAL will
be a market leader, offering multi-terabit protected capacity to the Asian
regional market, leveraging our substantial operational experience through
our Europe-Asia cable system. FNAL is planned to connect to the FLAG
Pacific-1 cable system in Japan, providing seamless multi-terabit
connectivity to the United States and to the Europe-Asia cable in Hong Kong
and Japan. FLAG Telecom expects to fund the costs of the system
through a combination of cash on hand and pre-sales."
Steve Liddell, CEO of Level 3 Asia, commented: "Level 3 is pleased to
partner with FLAG Telecom and our agreement enables us to deploy additional
capacity more rapidly and jumpstarts the extension of Tiger to our two new
target markets in Asia - Korea and Taiwan. This agreement effectively
allows us to gain a diverse ring system by sharing the development and
operating expenses with an industry partner and accelerates our speed to
new markets. Level 3 has successfully established a strong presence in the
region and has already landed our Tiger cable in Hong Kong, which will
link key Asian markets to each other and to the United States through
Level 3's ownership on the Japan-US cable. The system will be the first
multi-terabit cable to enter commercial service in Asia giving us the
first mover advantage in the market and the ability to offer international
broadband connectivity at industry leading pricing."
The Eastern leg of cable system is ahead of schedule having already landed
in Hong Kong. The cable will land in Korea and Taiwan later this year. The
Japan landing is expected to provide a seamless link to the Japan-US cable
system, followed by a link to the FLAG Pacific-1 cable system in 2002.
Additional landing stations are under development in Pusan, Korea and
Toucheng, Taiwan.
Built by Alcatel and Fujitsu, the intra-Asia submarine cable system fully
utilises state-of-the-art Dense Wavelength Division Multiplexing (DWDM)
technology operating at 10 Gbps and is expected to offer an initial combined
capacity of 320 Gbps, upgradeable to 2.5-3.8 Tbps. Terabit technology is
combined with SDH/SONET networking to provide customers with seamless
city-to-city connectivity.
"We are already delivering, ahead of schedule, the Eastern leg of this new cable
system in the booming region of Asia. We are delighted to have been awarded a
new contract to complete the entire project," said Jean Godeluck, President of
Alcatel's submarine networks activities. "Continuation of our long term
co-operation with FLAG Telecom and Level 3 allows us to anticipate the entire
project and deliver the system on time. As the world leader in optical
networking, we ensure they will provide a state-of-the-art network, benefiting
from the best of our technology,"
About Level 3
Level 3 (Nasdaq:LVLT) is a global communications and information services
company offering a wide selection of IP-based services including broadband
transport, colocation services, submarine transmission services and the
industry's first Softwitch based services. Level 3 offers services primarily to
communications intensive companies, which deliver their services over the Level
3 Network. Its Web address is www.Level3.com.
About FLAG Telecom
FLAG Telecom (Nasdaq: FTHL; LSE: FTL) is a leading independent global carriers'
carrier providing an innovative range of products and services to the
international carrier community, Application Service Providers (ASPs) and
Internet Service Providers (ISPs) across a global network platform optimized to
support the next generation of IP over optical data networks.
Network Services is a growing part of the FLAG Telecom business portfolio and
is expected to generate recurring revenues for the company. Its enhanced range
of products and services enables companies across the globe to innovate and
thrive in the new e-economy. FLAG Telecom has established IP gateways in San
Francisco, New York, London, Tokyo, Madrid and Cairo. Additional P0Ps are
located in Hong Kong and Seoul and Singapore is expected to be added to the
network shortly.
The FLAG Europe-Asia cable stretches from the UK to Japan and entered commercial
service in November 1997. FLAG Atlantic-1 (FA-1), the world's first dual
transoceanic terabit cable system, is currently under construction and is
scheduled to enter service in Q1 2001. FLAG Pacific-1 is the longest
transoceanic DWDM system announced to date and is expected to enter service in
2002.
Principal shareholders in FLAG Telecom are: Verizon Communications (NYSE:VZ)
(formerly Bell Atlantic and GTE) (USA) and Dallah Al Barakah Group (Saudi
Arabia). For further information, visit www.flagtelecom.com.
Statements contained in this Press Release which are not historical facts
may be forward-looking statements, as the term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those currently anticipated.