Level 3 and FLAG Telecom Announce Plans to Collaborate on Pan-Asia Submarine Cable System
Undersea Cable System to Connect Hong Kong, Japan, Korea and Taiwan, and Has Maximum Potential Capacity Ranging from 2.5 to 3.8 Terabits per Second
BROOMFIELD, Colo., Jan. 9, 2001 - Level 3 Communications, Inc. (Nasdaq:LVLT) today announced plans to collaborate with FLAG Telecom on the development of a pan-Asia submarine cable system that will connect Hong Kong, Japan, Korea and Taiwan.
"We are pleased to formalize the expansion of our previously announced Hong Kong to Japan undersea cable system to include connections to Korea and Taiwan," said Steve Liddell, chief executive officer for Level 3 Asia. "Our partnership with FLAG enables us to mitigate the cost of this expansion, as well as our initial cost of building the Hong Kong to Japan segment. This agreement is important because it accelerates our speed to new markets, and effectively allows us to gain a diverse ring system by sharing the development and operating expenses with an industry partner."
The undersea system will include Level 3's previously announced eastern link connecting Hong Kong, Taiwan and Japan, and a new western link that FLAG will build to connect Hong Kong, Korea and Japan. Level 3 expects the Hong Kong to Japan segment of the eastern link to be in service in the second quarter of 2001, with the eastern link's Taiwan segment to follow in late 2001. The company expects the entire western link to be ready for service in early 2002. Total cost of the system is estimated to be approximately $900 million.
"This agreement with FLAG will enable us to more rapidly meet the rising demand for bandwidth capacity in Asia, a region currently constrained by a significant lack of bandwidth supply," said Liddell. "In addition to linking four key Asian markets to each other, the pan-Asia submarine cable system will connect Hong Kong, Japan, Korea and Taiwan to North America and Europe through Level 3's ownership on the Japan-U.S. cable and the company's recently completed transatlantic cable."
Level 3 is overseeing construction of the eastern link of the pan-Asia cable system, and already has completed the cable landing in Hong Kong. FLAG Telecom will oversee construction of the western link, and will manage the entire pan-Asia submarine cable system once construction of the eastern and western links is completed. Level 3 and FLAG Telecom will each own three fiber pairs throughout the new system. The initial capacity of the system is expected to be 320 gigabits per second, but with upgrades could offer maximum potential capacity of 2.5 terabits per second on the eastern link and 3.8 terabits per second on the western link.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
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Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
