Breaking the Bandwidth Barrier--GTS Announces Europe's Next-Generation, Congestion-Free Internet.

Business Editors/Hi-Tech Writers

LONDON--(BUSINESS WIRE)--July 25, 2000

At London "webcast" Event With Partners Ciena and Cisco Systems,

GTS Announces Planned Quadrupling of GTS Ebone to 10 Gbps

GTS Announces In-service Launch of 1 Tbps System On Second Fibre

Pair of the GTS Pan-european Network, a 10-Times Capacity Increase

Over Previous-generation Technology

Global TeleSystems, Inc. (GTS) (NYSE: GTS; Easdaq: GTSG; Frankfurt: GTS), the leading European e*Business and borderless broadband services company, held a "webcast" event on July 20, where it announced that GTS will "break the Internet bandwidth barrier" by quadrupling the capacity of its pan-European Internet backbone, GTS Ebone, to 10 gigabits per second (Gbps). This represents enough capacity to carry approximately 500,000 simultaneous cinema-quality films.

Brian Thompson, chairman and chief executive officer of GTS, hosted the event at GTS European headquarters in London. During the presentation, he made the following comments: "With Ciena and Cisco here with us, we have assembled some of the people and companies who have built the Internet of today to answer the following question: Is Europe ready to meet the challenges of the next generation, and is Europe set to become an Internet superpower on par with the United States? We believe the answer is very clearly `yes.'"

He added: "Our ongoing effort to increase network capacity contributes to what we refer to as `killer connectivity' and `killer performance.' GTS, which already carries 25 percent of all IP transit in Europe on GTS Ebone, offers congestion-free Internet access; a full range of advanced services; unsurpassed content delivery; and extensive connectivity to millions of actual users--or customer `eyeballs.'"

Thompson highlighted the change in Internet traffic mix on GTS Ebone, Europe's largest Internet backbone, as a key factor that will lead to improved Internet performance in Europe, with more traffic remaining in Europe each year. He said: "As recently as 1998, up to 98 percent of the Internet traffic carried by GTS Ebone was routed through the United States. Today, that number is about 70 percent. We expect this to be approximately 50 percent in two years."

Also speaking at the event were: Gary Smith, chief operating officer at Ciena Corporation; John Doyle, chief science officer at Cisco Systems; Jim Reynolds, president of GTS Network Services; and Graham Finnie, a leading industry consultant at TeleGeography, Inc.

In their comments, both Ciena's Smith and Cisco's Doyle praised GTS for displaying the vision and leadership needed to provide state-of-the-art network services and capacity in Europe. "In any market," said Doyle, "there are visionaries who provide real leadership, and GTS has served that role in Europe."

Smith of Ciena stated: "GTS has the first-mover advantage. It has one of the world's highest capacity networks. GTS truly is the Internet backbone of Europe."

In his comments, Finnie of TeleGeography, a telecommunications industry research firm based in Washington, D.C., said that Europe has become an Internet "superpower," no longer dependent on the United States for its Internet traffic. He pointed out that London has surpassed New York as the world's leading Internet hub and that seven of the top-10 international Internet hub cities are located in Europe: Amsterdam, Brussels, Frankfurt, Geneva, London, Paris, and Stockholm. Only three of the top-10 hubs are located in the United States: New York, San Francisco and Washington, D.C.

All speakers at the event addressed the general question of whether Europe will meet the challenge of providing the high-capacity, next-generation Internet platform required to support the e*Business revolution sweeping Europe.

The panel agreed that Europe was stepping up to that challenge. Finnie underscored that, despite enormous progress, a number of challenges remain, including the need for local telephone companies to offer high-speed network access across Europe and for European regulators to move quickly to unblock these local service "bottlenecks."

The webcast in its entirety is available for viewing until August 1, 2000, on the webcast link located on GTS's corporate website, www.gtsgroup.com.

Excerpts from market leaders at the event included:

H. Brian Thompson, Chairman & CEO, GTS

-- History of GTS Ebone: "GTS has the first, most extensive and,

we think, the best physical Internet network in Europe, and it

all starts with GTS Ebone. GTS Ebone began with a rather

modest 64 kilobits of capacity back in 1992. It wasn't until

1994 that GTS Ebone got its first 2 MB link--from Stockholm to

Paris. By 1999, we had turned GTS Ebone into Europe's first

truly congestion-free Internet backbone network with 2.5 Gbps

of capacity across Europe."

-- "On most routes, GTS Ebone has more than 10 times the capacity

today than major competitors."

-- "Today we are announcing another monumental increase: GTS

Ebone's backbone capacity will jump to 10 Gbps over the next

year. This has already been tested in the lab, and we will

begin deploying this soon. A 10-Gbps backbone means that over

the entire network we can actually deliver about one terabit

of Internet traffic at any given time. This is real, not

theoretical, capacity."

-- On breaking the Internet bandwidth barrier: "Today we can

guarantee to every single one of our customers that there will

be no Internet congestion on our backbone network."

-- "No network carries more traffic for more customers to more

European cities over more live European network than GTS. In

fact, nobody even comes close."

-- On killer performance: "`Killer performance' means that you

are bringing a number of things together in one place--a world

class physical network, the full range of advanced services,

connectivity to actual users and great content. And that's

exactly what GTS does."

Graham Finnie, TeleGeography, Inc.

-- "Internet usage is growing faster in Europe than any other

region in the world."

-- "The speed of development in Europe is very fast. Right now,

there are 130 Gbps of lit capacity in Europe. That's growing

to 2.5 Tbps of lit capacity in 2001."

-- "Prices for Internet access are falling faster in Europe than

anywhere in the world. Bandwidth prices have fallen to U.S.

levels in Europe. This has spurred the rapid development of

network capacity."

-- "By 2002, 78 percent of European businesses surveyed (an

increase from roughly 25 percent today) expect to do business

via the Internet."

Gary Smith, Chief Operating Officer, Ciena Corporation

-- "The shift from voice to data traffic is the key shift to take

place in recent years."

-- "The balance of power is shifting towards Europe.

Historically, Europe has lagged behind the United States by

about two years, but now there's a subtle shift. In 1999,

Europe was deploying as much network capacity as the United

States."

-- "GTS was the first in Europe to deploy 100 Gbs of intelligent,

optical transport systems. GTS was the first to direct connect

IP right to the optical layer with Ciena and Cisco.

-- "There are over 30 European networks, but GTS was first and

remains one of the leaders."

-- "It's not just about big fat pipes, but how you connect them

together and deliver real service to real people."

-- "The next challenge is about intelligent fibre or virtual

bandwidth. It's not about being fibre rich. Things are

shifting. It's about what you do with that fibre. Fibre is

no longer an issue if you have enough of it in the right

places and have the right services over it. The key is optical

bandwidth on demand, available with the click of a mouse."

John Doyle, Chief Science Officer, Cisco Systems

-- "The Internet changes everything."

-- "It's a fundamental shift in paradigms. We've seen three

critical inflection points in technology: telephone,

television and the Internet."

-- "We're seeing an explosion in the growth of Internet users.

There are roughly 150 million users today, with 15 million

nodes. Usage is growing at 58 percent year over year. There

will be about 350 million Internet users by 2002."

-- "E-commerce and e-learning are experiencing 500-percent growth

per year."

-- "Cisco has realised $900 million in savings by using

e-business applications."

-- "Worldwide, the deregulation and globalisation of markets are

fundamentally changing business."

-- "The network architecture is also changing. We're moving

toward optical internetworking at the core of the network."

-- "By 2003, more than 50 percent of traffic will be on mobile

systems, not on fixed networks."

-- "We're proud to have partnered with a visionary, optical

internetworking company like GTS."

-- "The next-generation Internet in Europe is about delivering

services on terabit networks which scale to meet increasing

demand."

Jim Reynolds, President of Network Services, GTS

-- "Twenty years ago the industry was ruled by the ability to

compete on a national basis, but it's impossible to survive as

a national player anymore. The scale of change requires global

players."

-- "GTS is rolling out 1 terabit of capacity on a single fibre

pair because we've filled 100 gigabits of capacity with

customer traffic. Today we're leading the development of the

next generation network by deploying a 20-fold increase in

capacity to two terabits over the next two years."

-- "Fundamentally, the real issue is connectivity--connecting the

network to real users."

-- "Two years ago, virtually all traffic on our network went to

the United States--even traffic bound for Europe. We set out

to change that. We set out to build the fastest network in

Europe. If you've got the fastest network in the world, why

would you want to go to the United States?"

-- "GTS Ebone carries about 25 percent of all European Internet

traffic, which includes GTS traffic plus over 100 other major

ISP customers. Overall, we estimate that about 65 percent of

all Internet traffic in Europe is on our European network.

That helps to give us `killer connectivity.'"

-- "Yesterday, the GTS Internet highway consisted of one lane

times 2.5 Gbps of capacity. Today, the Internet superhighway

has 40 lanes times 2.5 Gbps of capacity. The next-generation

Internet backbone of Europe--what we call `breaking the

bandwidth barrier'--involves 100 lanes times 10 Gbps of

capacity."

About Ciena Corporation

CIENA Corporation's market-leading optical networking systems form the core for the new era of networks and services worldwide. CIENA's LightWorks(TM) architecture enables next-generation optical services and changes the fundamental economics of service-provider networks by simplifying the network and reducing the cost to operate it. Press Contacts: Denny Bilter or Aaron Graham; [phone]; e-mail: [e-mail]. Additional information about CIENA can be found at http://www.ciena.com.

About Cisco Systems

Cisco Systems Inc. (NASDAQ:CSCO) is the worldwide leader in networking for the Internet. News and information are available at the Cisco Press Room. Press Contact: Henriette Borch, Corporate/PR Communications Manager, EMEA; [phone]; e-mail: [e-mail]. Further information about Cisco Systems can be found at http://www.cisco.com.

About TeleGeography, Inc.

TeleGeography is the world's leading publisher of reports on international telecommunications flows and service providers. The company's flagship product--Telegeography--has been published annually since 1989 and is used by communication companies, consultancies, governments and financial institutions in over 90 countries. Contacts: Jessica Marantz, Marketing & Business Development; [phone]; e-mail: [e-mail]; and Tim Stronge, Research Analyst; [phone]; e-mail: [e-mail]. More information about TeleGeography can be found at http://www.telegeography.com.

About GTS (www.gtsgroup.com)

Global TeleSystems, Inc., is the leading provider of e*Business and borderless broadband services across Europe, serving businesses and carriers with a range of broadband, hosting, Internet/IP and voice services. As an industry leader in Europe, the company has the largest cross-border fiber optic network; the largest Tier-1 IP backbone (GTS Ebone); the most widely deployed pan-European e*Business sales and service staff; and the largest pan-European customer base. GTS's first and most extensive trans-European broadband fiber network includes on-net points of presence in 38 European cities (50 cities planned) and stretches across 17,500 route kilometers (25,000 route kilometers planned) with five city enterprise networks (CENs) (16 CENs planned), providing intra-city bandwidth. GTS is also developing an advanced trans-Atlantic dual-cable system in a joint venture with FLAG Telecom. The company has its corporate and operating headquarters office in London; additional corporate offices in Washington, D.C., Brussels and Cork, Ireland; and sales and service operations in 20 countries.

This press release may include forward-looking statements that involve risk and uncertainty. Although the company believes its expectations reflected in such forward-looking statements are based on reasonable assumptions, no assurance can be given that such projections will be fulfilled. Any such forward-looking statement must be considered along with knowledge that actual events or results may vary materially from such predictions due to, among other things, political, economic or legal changes in the markets in which GTS does business; competitive developments; or risks inherent in the company's business plan. Readers are referred to the documents filed by GTS with the U.S. Securities and Exchange Commission, specifically the most recent reports filed under the Securities Exchange Act of 1934 and registration statements filed pursuant to the Securities Act of 1933, which identify important risk factors.