Cable & Wireless Acquires ISPs as Part of $1 Billion Investment to Lead European Business Internet Market.

Business Editors/Hi-Tech Writers

LONDON--(BUSINESS WIRE)--Jan. 13, 2000

Cable and Wireless plc, the global telecommunications group, today announced the acquisition of eight of Europe's leading independent business Internet Service Providers (ISPs) - bringing Cable & Wireless' total investment in European business ISPs to US$500m ((pound)300m).

Cable & Wireless also announced an additional US$500m ((pound)300m) investment in its European IP (Internet Protocol) network build programme. The acquisitions and new network investment position Cable & Wireless as a leading provider of business IP services in Europe.

The new network investment is in addition to Cable & Wireless' existing US$1 billion ((pound)600m) programme to build the most extensive, leading edge data and IP network in Europe as part of its global IP strategy. The investment is to extend the coverage of the core 9.6 Gigabits (OC192) IP network being built across Europe. This will now connect 200 cities across the continent to the world's largest and most advanced data and IP network - more European connections than any other operator. By April this year 18 European cities will be connected, with the 200 cities connected by 2002 when the integration of the acquired ISPs PoPs (Points of Presence) and networks are completed.

Graham Wallace, Chief Executive of Cable and Wireless plc, said:

"These ISP acquisitions and the extra network investment are a major step forward in our plans to lead the market in providing IP services to business customers. The European business IP market is growing rapidly as e-commerce takes off in Europe and is expected to be worth US$29 billion in 2002. We will provide our business customers with all their IP requirements, from LAN design and installation, to internet access, web hosting and e-commerce and other IP applications and services.

"We are already in the top three companies in the world in the business IP market. The scale and capacity of Cable & Wireless' IP network in Europe, directly connected to the IP network in the US, Japan and Far East will allow us to provide the high-performance, secure IP platform which European businesses will require in the 21st Century.

"With current annual revenues in continental Europe of US$500m ((pound)300m), and with the acquisitions and network investments announced today, Cable & Wireless is a leading European provider of IP services to business."

The business ISP acquisitions announced today follow the acquisitions by Cable & Wireless during 1999 of business ISPs in Germany (ECRC), Sweden (pi.se) and the UK (INS).

Collectively, the acquired ISPs have:

-- annualised revenues of US$130m ((pound)80m) -- almost 1000 data and IP-skilled staff -- a customer base which includes major corporate customers such as

3Com, BMW, Honda, Lufthansa, McDonalds, Oracle, Siemens, Sony

Europe, and Volvo

-- major ISPs and webcentric companies such as LibertySurf,

Multimania and Alta Vista as customers

The companies whose acquisition has been announced today, are:

Austria Xpoint is a leading independent provider of Internet

connectivity and solutions to small and medium sized

firms, as well as larger corporate customers.

Belgium Based in Ghent, online internet is the largest

independent ISP in Belgium, providing high quality

Internet access to small businesses and offers

professional Internet solutions to business

customers.

France ISDnet, the major independent French IP operator,

with over 200 major clients, a national backbone

network, and more than 50 PoPs in France.

Italy The leading independent provider of integrated IP

solutions in Italy, Rome-based UNIDATA has an

excellent reputation for both quality and value and

is a leading supplier to the Italian public sector.

Italy DSLogic-DSNet is based in Bologna, providing

Internet access, web hosting, systems development

and e-commerce services to 1500 customers.

Spain grupo INTERCOM, based in Barcelona, is a full

service Internet company (e-Marketing developments,

e-Business projects, full I-net connectivity) with a

strong focus on business customers, 6800

predominantly SME business customers.

Switzerland agri.ch is the largest independent provider of

Internet services to corporate customers in the

German-speaking part of Switzerland and is the

country's top domain registration provider for SMEs.

Switzerland Petrel Communications is the largest provider of

Internet services to corporate customers in

French-speaking Switzerland, with 23 PoPs in

Switzerland and France, a subsidiary in France

serving Geneva-based French residents and small

businesses trading in Geneva.

Cable & Wireless also announced that it now had licences to operate in ten European countries (Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Spain, Switzerland and the UK), to provide an entire range of voice, data and IP services.

NOTES TO EDITORS

With customers in 70 countries, Cable & Wireless is a major global telecommunications business with 1998/99 revenues of around (pound)8 billion (USD$12.5 billion) and over 50,000 employees. Its business around the world offer a range of services spanning broadband data and Internet services, fixed and mobile voice, as well as interactive entertainment and information. Cable & Wireless' priority for expansion is the fast growing market of data and IP (Internet Protocol) services for business customers.

Since November 1998, it has announced major investments in advanced networks in the US and Europe, the restructuring of Cable & Wireless Communications in the UK and has acquired full control of Cable & Wireless IDC in Japan to support this strategy. Cable & Wireless now holds a unique position in terms of global coverage and services to business customers.