Level 3 Announces Significant Expansion Of Transatlantic Capacity To Meet Growing Demand
Strategic Purchase of up to 60x10G Capacity from Apollo Submarine Cable System Ltd
Transaction in Response to Growing Demand in Transatlantic Market and Continuing Bandwidth Growth in Europe
LONDON, February 9, 2006 Level 3 Communications (Nasdaq:LVLT) today announced that it has signed a definitive agreement with Apollo Submarine Cable System Ltd., to secure additional transatlantic capacity for its international network. Under the terms of the agreement, Level 3 will purchase 300 Gigabits (30x10G) of transatlantic capacity (equivalent to the capacity required to make approximately 10,000,000 simultaneous Internet Protocol (IP) based calls) and has immediate access to the capacity. Level 3 also has the right to purchase 300 Gigabits of additional capacity, taking the contracted capacity up to a total of 600 Gigabits (60 x 10G).
Level 3 continues to experience rapid customer growth on its network. The Level 3 global IP backbone network currently carries over 3.7 petabytes of Internet Protocol (IP) traffic every day (one petabyte is the equivalent of 2,000,000 CDs). IP traffic carried across Level 3’s transatlantic network has doubled in the last twelve months. Prior to this transaction, Level 3 had 480 Gigabits of lit transatlantic capacity, with approximately 85 percent of this currently in service and being utilised. This strategic purchase gives Level 3 scalable capacity on four diverse routes across the Atlantic, including the Level 3 developed Yellow cable system, and enables connectivity from the United States to Continental Europe that is entirely diverse from the New York region and the United Kingdom.
“We continue to see growth in demand for IP transit and growth on our transatlantic routes,” said Brady Rafuse, president of Level 3 in Europe. “The purchase increases the total available capacity on our transatlantic network to more than 700 Gigabits immediately and greater than 1000 Gigabits should we exercise our right. This investment facilitates the ongoing scalability of our network, guaranteeing supply to accommodate growth in the medium term,” he added. The Apollo Cable System, one of the most technically advanced Atlantic cable systems, is 13,000 km in length. It consists of two diverse submarine transatlantic cable legs connecting Long Island and New Jersey in the U.S., with Cornwall in the UK and Brittany in France.
“We are delighted to have completed this significant transaction and expanded our relationship with Level 3,” said Alan Robinson, managing director of Apollo Submarine Cable System Ltd. “Level 3 has always been an important customer to Apollo, but through this capacity transaction, Level 3 is now the major anchor tenant on the system.”
About Level 3 Communications
Level 3 (Nasdaq:LVLT) is an international communications and information services company. The company operates one of the largest Internet backbones in the world and is a primary provider of Internet connectivity for millions of subscribers through its partners. The company offers a wide range of communications services over its 23,000-mile broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, and patented softswitch managed modem and voice services. Level 3 is an industry leader in IP and VoIP services, which it provides to cable operators, ISPs, carriers and others. Level 3’s E-911 service offering includes both fixed location and nomadic VoIP E-911 capabilities, supporting an FCC-compliant E-911 solution for interconnected VoIP providers. Its Web address is www.level3.com.
The company offers information services through its subsidiary, Software Spectrum, and fiber-optic and satellite video delivery solutions through its subsidiary, Vyvx. For additional information, visit their respective Web sites at www.softwarespectrum.com and www.vyvx.com.
The Level 3 logo is a registered service mark of Level 3 Communications, Inc. in the United States and/or other countries. Level 3 services are provided by a wholly owned subsidiary of Level 3 Communications, Inc.
Some of the statements made by Level 3 in this press release are forward-looking in nature. Actual results may differ materially from those projected in forward-looking statements. Level 3 believes that its primary risk factors include, but are not limited to: developing new products and services that meet customer demands and generate acceptable margins; increasing the volume of traffic on Level 3’s network; overcoming the softness in the economy given its disproportionate effect on the telecommunications industry; integrating strategic acquisitions; attracting and retaining qualified management and other personnel; successfully completing commercial testing of new technology and information systems to support new products and services, including voice transmission services; ability to meet all of the terms and conditions of our debt obligations; overcoming Software Spectrum’s reliance on financial incentives, volume discounts and marketing funds from software publishers; reducing downward pressure of Software Spectrum’s margins as a result of the use of volume licensing and maintenance agreements; and reducing rate of price compression on certain of the Company’s existing transport and IP services. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this release should be evaluated in light of these important factors.
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