Verizon to operate global network linking businesses with Europe, Asia and Latin America

Feb. 7, 2001
In an initiative designed to expand Verizon Communications' presence in the large-business market, the company announced plans to assemble and operate a global telecommunications network that will link the United States with major cities in Europe, Asia and Latin America.

In an initiative designed to expand Verizon Communications' presence in the large-business market, the company announced plans to assemble and operate a global telecommunications network that will link the United States with major cities in Europe, Asia and Latin America.

Verizon will acquire fiber-optic cable, switching and transmission equipment and related network management software to deploy the high-speed, broadband network, which will carry data, Internet and voice traffic. The first phase will link New York to London, Paris, Amsterdam, Brussels, Frankfurt and Milan, and is scheduled to begin operating by the second quarter of this year. Links between New York and Toronto and between Hawaii, Hong Kong, Tokyo and Sydney are already operating and will be part of the new network.

Verizon will make a significant capital investment to complete the first phase of the network. This investment is already incorporated in Verizon's capital budget and in the financial guidance for 2001 and 2002 that the company issued last year. The company also expects to save at least $300 million in transport costs over five years because it will be significantly less expensive to route international calls over Verizon's global network rather than to continue to pay other carriers to transport the calls.

Over the next two years, the network will be expanded and provide direct links to other leading commercial and financial centers including Geneva, Zurich, Madrid, Singapore, Buenos Aires, Caracas and Mexico City. In addition to serving the large-business market, other major benefits of the network include:

* It is anticipated that Verizon's business units will route calls over the new network. This will enhance Verizon's ability to meet the growing global needs of the consumer market and to provide service at lower cost.

* Capacity on the network will be offered on a wholesale basis to other carriers that provide traffic and services to and from the United States or between select regions within Europe, Asia and the Americas.

* Under a joint marketing and resale agreement between Verizon and Genuity, a data services and network company, Verizon will resell a variety of Genuity's advanced Internet products such as Web hosting and dedicated and dial-up Internet access.

* A variety of personalized customer-care initiatives will provide customers with direct, 24-hour-a-day access to network information critical to their individual business needs.

"We will manage and operate our global network by owning the switches and controlling our own transmission facilities, rather than just re-selling capacity and services on another carrier's network," said Thomas A. Bartlett, president of Global Solutions Inc. (GSI), a new Verizon business unit that is responsible for assembling and managing the global network. "As a result, we will be able to offer a facilities-based network that connects commercial centers around the globe and that provides an array of voice, data and Internet services to large business, wholesale and residential customers."

Key elements of the network will be provided by two companies with which Verizon has close alliances and in which it has ownership stakes: FLAG Telecom and Metromedia Fiber Network, Inc. (MFN). FLAG Telecom is an independent network services provider and carriers' carrier. It owns and operates a high-capacity, undersea cable system that links Europe, the Middle East and Asia. The company is completing work on a trans-Atlantic cable between New York, London and Paris that is scheduled to begin operating next month. FLAG is also developing FLAG North Asian Loop, which will connect major cities throughout the Asian region, and is developing a trans-Pacific cable. MFN owns fiber-optic infrastructures within key metropolitan areas in the United States and internationally that can transmit data, video, Internet and multimedia applications. MFN has deployed more than 1.2 million fiber miles and plans to increase the total to 3.6 million miles worldwide by 2004.

GSI plans to operate gateway switches in New York, Los Angeles, Honolulu and London to aggregate data and voice traffic and route it over the new network. A European network operations center will be constructed in a suburb of London. GSI will assemble additional portions of the new network through a variety of methods, including forming partnerships with other companies and leasing capacity on the networks of other carriers.

Initially, Verizon's Enterprise Solutions Group will market the global network to large business customers in New York, as well as to business customers in states outside the former Bell Atlantic footprint that were served by GTE prior to the companies' merger forming Verizon.

Verizon will extend its customer base for the new network to the New England and mid-Atlantic states once Verizon receives regulatory approval to offer long-distance service in each of those states. The company has filed for approval in Massachusetts and also plans to seek approval this year for Connecticut, New Jersey, Pennsylvania and Rhode Island.

Verizon also has negotiated an exchange agreement with its Canadian affiliate TELUS, one of Canada's telecommunications companies, that provides for utilization by TELUS of the new network.

Verizon Communications (NYSE: VZ) is a providers of communications services, and print and online directory information. For more information, visit www.verizon.com.

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