Denver, July 15, 1999 ?Qwest Communications International Inc. (Nasdaq: QWST), the Internet communications company, today said the KPNQwest joint venture is beginning construction on the German EuroRing?; the third of six state-of-the-art OC-192 10 Gbps self-healing rings being built in Europe by 2001. This investment of more than $200 million reinforces KPNQwest's commitment to meeting the demand for bandwidth, and further underpins its strategy to service businesses needing to realize the potential that high capacity electronic commerce applications and other services can provide for them.
The early mover in the explosive market for European bandwidth, KPNQwest is poised to deliver the most modern, high capacity capabilities to meet the surging demand driven by data and IP services and applications (European countries are forecast to experience 100%+ growth between 1999-2003: source IDC). When completed, the EuroRings? network will provide reliable, scalable, secure and seamless broadband and IP-based communications services to customers, covering a total of 39 key business centres in Europe. The wholly owned KPNQwest European network will also be linked to the Qwest U.S. network.
"With the first two EuroRingsÔ now lit ? on time, on budget and actively serving customers--, we now are aggressively following our business plan to provide service in additional markets by 2000 by starting the construction of our third EuroRingÔ," said Henjo Groenewegen, chief operating officer of KPNQwest.
"The new ring will interconnect to the first two rings and, as in the case of Rings 1&2, will consist of 96 fiber strands capable of delivering 80 colors per strand at 10Gbps per strand. This enormous capacity enables us to service the explosive market for bandwidth and applications throughout Europe and beyond," said Groenewegen,.
Jack McMaster, chief executive officer of KPNQwest added, "With the successful completion this week of the acquisition of Xlink Consulting ISP assets in Germany, the commencement of this construction enables KPNQwest to accelerate our penetration of the growing market for data and services in Germany and beyond."
The first two EuroRings? now connect a total of 14 European business centers, and the third EuroRingÔ will bring capacity to an additional 10 markets in Germany: Berlin, Bremen, Frankfurt, Hamburg, Hanover, Leipzig, Munich, Nuremberg, and Stuttgart.
In addition to the high-speed capacity of the EuroRings?, KPNQwest has, through its EUnet International and Xlink IP brands, an Internet Service Provider footprint based on national backbones in 14 European markets (Austria, Belgium / Luxembourg, Czech Republic, Estonia, Finland, France, Germany, Portugal, Romania, Norway, Spain, Sweden, Switzerland), with more than 450 gateways to the Internet. Together with the peering agreements of KPNQwest, these assets form a unique, transit-free stronghold in the IP space.
The KPNQwest venture was announced last November and finalized on April 13, 1999. Analysts estimate that communications services in Western Europe, the addressable market for the company, will grow to about $224 billion by the year 2001.
Customers for the company include multi-national and other firms worldwide that want integrated voice, data and image communications; and other communications companies that need to buy wholesale network capacity.
Primed and future-proofed for data and IP, services will include IP-based voice communications; high-speed Internet access; intranets; extranets, and Web hosting; IP-based virtual private networks and ATM (Asynchronous Transfer Mode) and IP transit services for the wholesale market.
KPNQwest is equally owned by KPN and Qwest Communications International Inc., the Internet communications company, headquartered in Denver, Colo. The new company brings together the state-of-the-art fiber-optic networks of the two partners and the Internet services expertise and customer base of EUnet International. The company has 650 employees formerly employed by KPN INS and EUnet International. The company plans to build and operate a high-capacity European fiber optic, Internet Protocol-based network that has 2,100 miles or 3,500 kilometers and will span 8,100 miles or 13,000 kilometers when it is completed in 2001. This network will interconnect with Qwest's 18,500-mile or 29,500 kilometer fiber-optic network in the U.S. KPNQwest will offer a full range of broadband and IP-based communications services.
This release may contain forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, failure to complete the network on schedule and on budget, financial risk management and future growth subject to risks, Qwest's ability to achieve Year 2000 compliance, and adverse changes in the regulatory or legislative environment. This release may include analysts' estimates and other information prepared by third parties, for which Qwest assumes no responsibility. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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