Cbeyond Communications Installs 4,000th Customer, Deposits $41 Million.

Business Editors

ATLANTA--(BUSINESS WIRE)--Nov. 25, 2002

Atlanta-based Cbeyond Communications, the world's first 100% Internet Protocol (IP) local phone network, announced today it has installed over 4,000 small to medium-sized business customers on its network since opening its first market just 18 months ago.

Cbeyond also announced today it has deposited $41 million in funding in connection with its initial $141 million investment commitment. This latest investment is expected to fund the operational costs of the company through profitability.

"Customers want what we're selling," said CEO and Chairman Jim Geiger. "Our rapid acquisition and installation of more than 4,000 customers proves small businesses are looking for our affordable package of premium communication services. We also have a very high referral rate from our existing customers and an industry-leading retention rate of over 99% that speaks for itself."

Cbeyond, which provides an integrated package of premium high-speed Internet access, local phone service and long distance via reliable T-1 lines to business customers in Atlanta, GA, Dallas, TX and Denver, CO, is now installing more than 1,500 T-1 lines each quarter across its three markets.

"Now that we are at full ramp in each market, we're adding over 500 new customers onto our network every month," said Geiger.

Cbeyond's latest funding of equity from its investors is expected to complete the financing needs of the company's current three markets.

"Our strong record of success in growing the business while managing our costs effectively has given our investors the confidence to make this funding now - in a highly negative climate for telecom investment," said Cbeyond CFO Robert Fugate. "We're building a profitable business, and now we have the cash needed to reach that goal."

Cbeyond's mission is to bring "big business" communication tools to small businesses at prices they can afford and at costs which allow the company to return a profit.

"We invested in next-generation hardware and software that was less expensive to buy, and less expensive to operate and maintain, while at the same time allowing us more flexibility to offer customers a greater value," said Geiger.

Cbeyond, a registered member of the Cisco Powered Network, uses the Cisco Systems, Inc. local services voice solution. This solution provides Cbeyond with an infrastructure that enables them to deliver integrated broadband access and voice services to their small-business customers using a softswitch based architecture.

"Utilizing a 100% Cisco network and embracing next-generation IP packet call control, we are excited to see companies like Cbeyond Communications changing the rules for small-business communications service offerings," said Phil Sherburne, senior director and general manager of the Packet Telephony Call Control Business Unit (PTCC) within Cisco.

About Cbeyond Communications

Cbeyond Communications, the world's first 100% Internet Protocol (IP) local phone network, is a privately held, Atlanta-based services carrier. Using Internet Protocol (IP) architecture and a 100% Cisco network, Cbeyond delivers to small business customers an integrated package of carrier-grade local and long distance telephony services, high-speed Internet access and Internet-based applications for prices significantly less than what they are typically paying now for voice alone. Cbeyond serves customers in Atlanta, Dallas and Denver. Cbeyond is fully funded for the markets it operates in, with investment being led by Madison Dearborn Partners. Additional investors include Battery Ventures, Vantage Point Venture Partners and company management. For more information on Cbeyond Communications, visit the website at www.cbeyond.net.