LINKdotNET Purchases Capacity From Cairo to New York On the FLAG Telecom Cable Network.

Business Editors

HAMILTON, Bermuda--(BUSINESS WIRE)--May 1, 2002

FLAG Telecom Holdings Ltd. (Nasdaq: FTHLQ; LSE: FTL), a leading global network services provider and independent carriers' carrier, today announced that LINKdotNET, one of the leading Internet providers in Egypt, has signed an STM-1 (155Mbps) capacity agreement with one of FLAG Telecom's subsidiaries for service between Cairo and the Internet hub city of New York. Terms of the multi-million dollar agreement were not disclosed.

This is made possible as a result of the establishment of a FLAG Telecom virtual point of presence (VPOP) in Cairo and an agreement with Telecom Egypt to jointly provide network services to the international carrier community and ISPs supported by service level guarantees. FLAG Telecom's MBS product provides city-to-city connectivity from the center of Cairo to major business centers across the world.

The STM-1 (155Mbps) service will utilize FLAG Telecom's global network, specifically its FLAG Europe - Asia system and FLAG Atlantic -1 (FA-1) system the world's first and only- multi-terabit transatlantic cable system. This will allow LINKdotNET to reliably route its Internet traffic with flexibility. FLAG provides an innovative range of carrier services and network services to the international carrier community, ASPs and ISPs.

LINKdotNET one of the largest ISPs in the Middle East and North Africa selected FLAG Telecom in order to benefit from its Managed Bandwidth Service, which provides seamless solutions and fully managed international circuits across its global network.

Khaled Beshara, CEO of LINKdotNET, said "Customer satisfaction has always been a top priority for us at LINKdotNET. With FLAG Telecom's fully protected service, we aim to provide the LINKdotNET users with seamless service that would enable them to surf the net, perform e-commerce transactions, and utilize the various capabilities of the world wide web."

"The introduction of the Free Internet Initiative in Egypt has set new challenges for the Egyptian ISPs. Connection speed and traffic management have become the main dominators of survival on both the short and long term - to this end our agreement with FLAG Telecom is essential."

Mr. Walid Irshaid, FLAG Telecom's Regional Vice President of Middle East said, "We are delighted that we are able to offer LINKdotNET a `one-stop shop' for their international connectivity, taking full responsibility for ordering, provisioning and management. We look forward to helping enable LINKdotNET to expand its position within the Middle East and Africa region."

At the time of the signing of the POP arrangement in July 2000, Akil Beshir, Chairman of Telecom Egypt, said: "Today's agreement with FLAG Telecom takes our partnership with the company to a new level. Many customers are looking for city-to-city connections around the world and service level guarantees. FLAG Telecom's network platform connects major business centers our customers want to reach. We are a landing partner on the FLAG Europe-Asia cable, and our facilities are already interconnected, allowing us to offer advanced network services to our customers and other leading carriers quickly. We are delighted to be working with FLAG Telecom once again."

About FLAG Telecom

FLAG Telecom is a leading global network services provider and independent carriers' carrier providing an innovative range of products and services to the international carrier community, ASPs and ISPs across an international network platform designed to support the next generation of IP over optical data networks. On April 12 and April 23, 2002, FLAG Telecom and certain of its subsidiaries filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. FLAG Telecom continues to operate its business as a debtor in possession under chapter 11 protection. FLAG Telecom has the following cable systems in operation or under development: FLAG Europe-Asia, FLAG Atlantic-1 and FLAG North Asian Loop. Recent news releases and information are on FLAG Telecom's website at: www.flagtelecom.com

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