XO Announces Facilities-Based Data-Centric Focus Targeting Customers With High-Bandwidth Applications in Europe.

Business Editors/Hi-Tech Writers

RESTON, Va.--(BUSINESS WIRE)--Nov. 28, 2000

XO Communications Inc., (NASDAQ:XOXO) formerly known as NEXTLINK/Concentric, said today it will launch a tightly focused, data-centric European broadband service strategy targeted at multi-location business customers, ISPs and other telecommunications carriers.

XO intends to provide facilities-based, high bandwidth data services including global transit, transport, gigabit ethernet, VPN, wave length services, and shared and managed hosting services in Western Europe by as early as mid-2001.

XO has recently undertaken initiatives to position itself as a data-centric broadband leader in Europe while implementing a capital-efficient plan for its European operations. These initiatives include:

-- Hiring industry veteran Mike Read as President of XO Europe to develop its data-centric European strategy.

-- Entering into definitive agreements with Level 3 that revise the terms of XO's European network purchase, including the reduction of XO's payments to Level 3 to $163 million from the previously announced $306 million, in exchange for a reduction of network facilities received. Additionally, XO will receive rights to use empty fiber conduits for future network deployment in Berlin, Dusseldorf, Hamburg and Munich.

-- Bidding for and being provisionally awarded fixed wireless spectrum licenses in the United Kingdom including licenses covering the Greater London, Greater Manchester and Birmingham / West Midlands Regions in the recently completed U.K. Broadband Fixed Wireless Auction.

"We now have in place a European plan that optimizes capital spending and operationally positions XO to seize a tremendous business opportunity in Europe," said XO Chairman and CEO Dan Akerson. "We continue to believe the long term winners in telecommunications will be those companies that own their strategic network assets.

"Once our networks are completed, we believe XO will be one of a few companies in the world capable of delivering customer premise to customer premise broadband solutions between major European cities and North American markets entirely across its own networks."

XO's Data-centric Focus in Europe

XO intends to address the European market opportunity by launching a data-centric strategy to provide facilities-based connectivity and broadband solutions between major business centers in Europe as its European metro and inter-city networks are deployed.

The company expects to leverage and augment its existing data business in the United Kingdom and the Netherlands by delivering high bandwidth global transit, transport, gigabit ethernet, wavelength, VPN and hosting services to multi-location customers, ISP's and other telecommunications carriers in Western Europe.

"XO has the opportunity and credibility to be a European market leader by effectively leveraging and extending its U.S. network and by utilizing its existing ordering and provisioning operational support systems to increase our speed to market in Europe," said XO Europe President and Managing Director Mike Read.

"Moreover, XO already possesses one of the industry's leading hosting platforms and has Tier One Internet peering relationships and existing European data centers in London, Paris and Amsterdam that will give the company the ability to deliver high margin solutions to business customers with high bandwidth applications."

Definitive Agreements Reached with Level 3

After reviewing its network requirements in Europe, XO initiated a number of modifications to the agreement in principle with Level 3 that was originally announced in May of this year.

These modifications, now reflected in definitive agreements, include the reduction of XO's payments to Level 3 to $163 million, from the previously announced payments of $306 million, in exchange for a reduction of network facilities received by XO.

Under these agreements XO will receive robust metro fiber facilities that include a number of empty fiber optic conduits in London, Frankfurt, Amsterdam and Brussels and dark fibers in Paris. XO will also receive 24 state-of-the-art fibers to connect XO's metro European networks in five countries with initially more than a terabit of capacity utilizing current optical technology.

Additionally, XO will receive transatlantic capacity to connect XO's customers in Europe and North America. Most of the network facilities are expected to be ready for commercial service in the second half of 2001.

As a part of the revised transaction, Level 3 will retain an empty inter-city conduit and a metropolitan fiber conduit in London rather than transfer those conduits to XO as originally contemplated by the agreement in principle.

The total number of fibers in Paris to be acquired by XO and the tag along rights for future European network construction will also be reduced. XO will also receive rights to use empty fiber conduits for future network deployment in metro networks in Berlin, Dusseldorf, Hamburg and Munich in the revised transaction.

"We are pleased to have closed this transaction allowing us to extend our facilities based broadbrand strategy into Europe," said XO Chief Executive Officer Dan Akerson.

"Following our recent hiring of Mike Read to direct our European operations, we conducted a detailed review of our European networking requirements and concluded that rapidly advancing optic networking technology make us very comfortable with the amount of network we will now receive.

"We continue to consider Level 3 a first-rate, respected XO strategic business partner and we look forward to working with them closely as we move ahead."

Broadband wireless in the United Kingdom

XO also announced it has received confirmation from United Kingdom's Office of Telecommunications that it has been provisionally awarded three fixed wireless spectrum licenses covering 17.6 million POPs in the U.K. including licenses covering the Greater London, Greater Manchester and Birmingham / West Midlands Regions.

The winning bids for the licenses were submitted by Fault Basic LTD, a wholly owned subsidiary of XO, for a total final bid of (pound)10.54 million (approximately $15.2 million / U.S.).

XO intends to extend its metro networks in some areas of the United Kingdom directly to customers' premises by providing last mile broadband services through a fixed wireless connection. The three U.K. licenses cover spectrum located in the 28 GHz spectrum band which is similar to broadband fixed wireless spectrum licensed to XO and its affiliates in the United States and Canada.

As a result, it is expected that XO will be able to use wireless network equipment and technology that is similar to that being deployed in North America to extend its metro networks in the United Kingdom.

XO to hold European Strategy Conference Call with Investors Today

As announced on Wednesday, November 22nd, XO Senior Management will hold a conference call open to investors and the public to detail the company's European strategy at 11:00 a.m. EST on November 28, 2000. Investors can listen to the call by dialing 800-992-7413 (U.S.) and 801-303-7424 (international).

Replay will be available for 72 hours by dialing 800-801-6000 (US) and 913-383-5731, both PIN 3542. Additionally, the call will be webcast and can be accessed via www.xo.com/news.

About XO Communications

XO Communications is one of the world's leading providers of broadband communications services offering local and long distance voice communication services, Digital Subscriber Line (DSL) access, Web hosting and e-commerce service, Virtual Private Networks (VPNs), dedicated access, global transit and application infrastructure services for delivering applications over the Internet or a VPN.

XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships that, when complete, will serve much of the United States, Canada and Europe. In the United States, XO has more than 570,000 metro and inter-city fiber miles in operation.

The Company is also North America's largest holder of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities and a partnership with licenses covering all of the top cities in Canada.

XO has also acquired metro fiber networks and conduits being constructed in Europe that, when complete, will serve London, Berlin, Dusseldorf, Frankfurt, Hamburg, Munich, Brussels, Amsterdam and Paris markets and an 88,000 fiber-mile pan-European fiber network connecting 21 major European cities and transatlantic capacity that will eventually expand to 10 Gbps.

The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements include those describing XO's planned European operations including construction of its networks, expected capital expenditures and matters related to its domestic networks, and future developments related to fiber optic equipment capacity.

Management wishes to caution the reader that these forward-looking statements are only predictions and are subject to risks and uncertainties and actual results may differ materially from those indicated in the forward-looking statements as a result of a number of factors.

These factors include, but are not limited to, the ability of XO to market, sell and provision its services, to design and construct fiber optic networks and, install cable and facilities, including switching electronics, to develop, install and provision fixed wireless equipment, interconnect that equipment with its fiber networks and connect those networks to customers, and developments made by fiber optic equipment vendors.

These and other risks and uncertainties to which the XO business is subject are described in XO reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1999 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.

XO, the XO design logo are trademarks of XO Communications, Inc.