Announcement Comes as Level 3 Nears Launch of Internet and Communications Services in
Hong Kong and Tokyo
BROOMFIELD, Colo., July 11, 2000 – Level 3 Communications, Inc. (Nasdaq:LVLT) today announced plans to expand its Asian operations into Taipei, Taiwan and Seoul, Korea. Level 3 President and Chief Executive Officer Jim Crowe made the announcement during a press conference in Hong Kong, where he outlined key elements of the company's Asian expansion strategy.
The announcement comes as Level 3 nears the end of preparations to launch Internet and communications services in Hong Kong and Tokyo. Crowe said that he believes there is tremendous opportunity for Level 3 in Taiwan and Korea due to the pace of innovation and technology leadership in both countries.
"With millions of Internet users and more than 100 Internet service providers (ISPs) all requiring bandwidth, Taiwan is one of the most active Internet markets in Asia," said Crowe. "It has a strong technology track record and good geographical location, which positions it favorably to be an Internet hub in the region. For an Internet enabler and broadband infrastructure company like Level 3, it makes perfect sense for us to be there." Crowe cited Korea as one of the most technologically advanced nations in the world. "We are seeing Korea leap frogging a lot of technologies and leading the industry in terms of Web-enabled services such as video streaming, video conferencing, and rollout of wireless Internet access," said Crowe. "Korea has one of the highest Internet penetration rates in the world, with more than one million broadband subscribers, a figure that already exceeds many European countries. The fact that Korea is now a world leader in broadband local access is driving rapid growth of Internet traffic out of the country."
Initial Plans In both Taipei and Seoul, Level 3's initial plans include the construction of Internet and communications facilities it calls "Gateways." Level 3 created the term Gateway to describe the major portals to its network. These advanced technical facilities provide colocation space where Web-centric companies can physically locate their equipment and connect directly to the Level 3 network. Gateways also house Level 3's own equipment, and offer customers interconnection with the public Internet and other local and long distance networks.
Additionally, Level 3 announced it will connect its Korean and Taiwanese Gateways to Hong Kong, Tokyo and the rest of the company's global network via its North Asian undersea fiber-optic cable system. The company's expansion into these important markets is fully pre-funded as part of its global business plan. Level 3 expects to begin offering broadband services to ISPs, application service providers ("ASPs") and other Web-centric companies in Taiwan and Korea by the second half of 2001.
"The majority of all Internet traffic originating in Taipei and Seoul travels to the United States," said Crowe. "We believe we are well positioned to offer Taiwanese and Korean customers international connectivity within Asia, and to North America and Europe, over our network of undersea and terrestrial fiber optic networks." Crowe added that Level 3's objective is to drive down the cost of bandwidth services and to help enable the Internet economy in Taipei and Seoul. "Currently the cost of bandwidth in key Asian markets is 8 to 11 times higher than in the United States or Europe," said Crowe. "Our aim is to bring the power of Silicon Economics to communications by continuing to drop the cost of moving information year after year as the underlying technology continues to improve."
Since establishing its Asia headquarters in Hong Kong last year, Level 3 has made substantial progress in bringing its Internet-focused business strategy to the region. The company announced plans to build the first leg of its North Asia undersea fiber optic cable system connecting Japan to Hong Kong in January. The cable is expected to begin carrying Internet and communications traffic in the second quarter of 2001.
Level 3 is also in the advanced stages of building Gateway facilities in Hong Kong's Quarry Bay and the Minato-ku district of Tokyo. Level 3 expects to begin offering broadband services in Hong Kong and Tokyo in the fourth quarter of this year.
(*Softswitches are advanced software based switching systems that enable Level 3 to provide services combining the best features of the Internet and traditional telephone networks.)
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.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
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.
