RNS Number:8930W
Flag Telecom Holdings Ld
9 January 2001


Contacts

Level 3                                    FLAG Telecom
Samantha English                           Jane Windsor
+852 2201 8026                             +44 20 7317 0811
samantha.english@level3.com                jwindsor@flagtelecom.com

Cannis Wong                                Catherine Nash (investor Relations)
+852 2201 8016                             +44 20 7317 0894
cannis.wong@level3.com                      cnash@flagtelecom.com


Robin Miller (investor Relations) 
+1 720 888 2518 
robin. miller@level3.com



                   FLAG TELECOM AND LEVEL 3 ENTER AGREEMENT ON
                         PAN-ASIA SUBMARINE CABLE SYSTEM

          Submarine Cable set to be Region's First Multi-Terabit System

London  and  Hong Kong, 9 January 2001 - Level 3 Communications,  Inc.  (Nasdaq:
LVLT),  a  global  broadband infrastructure company, and FLAG Telecom  (Nasdaq:
FTHL;  LSE:  FTL),  a  leading independent global carriers' carrier  and 
network services  provider,  today  announced  an  agreement  for  a  new 
multi-terabit intra-Asia  submarine  cable system. The six-fibre pair system  is
designed  to offer  intra-regional, city-to-city connectivity between the high
traffic centres of Hong Kong, Seoul, Tokyo, and Taipei.

Level 3's  existing  North  Asian  cable  system,  which  is  currently under
development, will form the Eastern leg of the new system connecting Hong Kong,
Taiwan and Japan. FLAG Telecom will develop the Western leg,  connecting Hong
Kong, Korea and Japan. The first link of the system, between Hong Kong and
Japan, is expected to enter service in the second quarter of 2001. FLAG Telecom 
will be responsible for the integration of the Eastern and Western links of the
system. The whole system will be over 10,000 kilometres in length and will be
managed and operated by FLAG Telecom.

Level  3  will have three fibre pairs on the system which will be  referred
to  as "Tiger". FLAG Telecom's three fibre pairs on the new system will  be
branded  as  FNAL (FLAG North Asian Loop). Total cost of the entire  system
is estimated to be approximately US$900 million.

Ed McCormack COO, FLAG Telecom, said: "This agreement with Level 3 marks
another major step in our strategy to develop a low-cost, scaleable global
IP network  to  support  our  expanding  Network  Services  business.  The
development  of  a  North  Asian loop has been an  important  part  of  our
network  expansion  plan  and we now expect to  have  terabit  connectivity
between major Asian cities in a substantially shortened time period and, we
believe,   significantly  ahead  of  our  competition.  We  also   gain   a
significant  and highly-respected market player on the system.  FNAL  will
be  a market leader, offering multi-terabit protected capacity to the Asian
regional market, leveraging our substantial operational experience  through
our  Europe-Asia cable  system. FNAL is planned to  connect  to  the  FLAG
Pacific-1 cable system  in  Japan,  providing  seamless multi-terabit     
connectivity to the United States and to the Europe-Asia cable in Hong Kong 
and Japan.  FLAG Telecom expects to fund the  costs  of  the  system
through a combination of cash on hand and pre-sales."

Steve  Liddell,  CEO of Level 3 Asia, commented: "Level 3 is pleased to     
partner  with FLAG Telecom and our agreement enables us to deploy additional    
capacity more rapidly and jumpstarts the extension of Tiger to our two  new    
target  markets  in  Asia - Korea and Taiwan.  This  agreement  effectively    
allows  us  to  gain a diverse ring system by sharing the  development  and    
operating  expenses with an industry partner and accelerates our  speed  to    
new  markets. Level 3 has successfully established a strong presence in the    
region  and  has  already landed our Tiger cable in Hong Kong,  which  will    
link  key  Asian  markets to each other and to the  United  States  through    
Level  3's  ownership on the Japan-US cable. The system will be  the  first    
multi-terabit  cable  to enter commercial service in  Asia  giving  us  the    
first  mover advantage in the market and the ability to offer international    
broadband connectivity at industry leading pricing."

The Eastern leg of cable system is ahead of schedule having already landed  
in Hong Kong. The cable will land in Korea and Taiwan later this year.  The 
Japan landing is expected to provide a seamless link to the Japan-US cable 
system, followed by a link to the FLAG Pacific-1 cable system in 2002. 
Additional landing stations are under development in Pusan, Korea and 
Toucheng, Taiwan.

Built by Alcatel and Fujitsu, the intra-Asia submarine cable system fully
utilises state-of-the-art Dense Wavelength Division  Multiplexing (DWDM)
technology operating at 10 Gbps and is expected to offer an initial combined
capacity of 320 Gbps,  upgradeable to 2.5-3.8 Tbps.   Terabit technology is
combined with SDH/SONET networking to provide customers with seamless
city-to-city connectivity.

"We are already delivering, ahead of schedule, the Eastern leg of this new cable
system  in  the booming region of Asia. We are delighted to have been awarded  a
new  contract to complete the entire project," said Jean Godeluck, President  of
Alcatel's  submarine  networks  activities.  "Continuation  of  our  long   term
co-operation  with FLAG Telecom and Level 3 allows us to anticipate  the  entire
project  and  deliver  the  system  on time. As  the  world  leader  in  optical
networking,  we ensure they will provide a state-of-the-art network,  benefiting
from the best of our technology,"

 
About Level 3

Level 3 (Nasdaq:LVLT) is  a global communications  and  information services
company offering a wide selection of IP-based services  including broadband
transport,  colocation services,  submarine transmission services and the
industry's first Softwitch based services. Level 3 offers services primarily  to
communications intensive companies, which deliver their services over the  Level
3 Network. Its Web address is www.Level3.com.

About FLAG Telecom

FLAG Telecom (Nasdaq: FTHL; LSE: FTL) is a leading independent global carriers'
carrier  providing  an  innovative  range  of  products  and  services  to   the
international  carrier  community, Application  Service  Providers  (ASPs)  and
Internet Service Providers (ISPs) across a global network platform optimized  to
support the next generation of IP over optical data networks.

Network  Services is a growing part of the FLAG Telecom business portfolio  and
is  expected to generate recurring revenues for the company. Its enhanced  range
of  products  and  services enables companies across the globe to  innovate  and
thrive  in  the new e-economy. FLAG Telecom has established IP gateways  in  San
Francisco,  New  York,  London, Tokyo, Madrid and  Cairo.  Additional  P0Ps  are
located  in  Hong Kong and Seoul and Singapore is expected to be  added  to  the
network shortly.

The FLAG Europe-Asia cable stretches from the UK to Japan and entered commercial
service in November 1997. FLAG Atlantic-1 (FA-1), the world's first dual
transoceanic terabit cable system, is currently under construction and is
scheduled to enter service in Q1 2001.  FLAG Pacific-1 is the longest
transoceanic DWDM system announced to date and is expected to enter service in
2002.

Principal shareholders in FLAG Telecom are: Verizon Communications (NYSE:VZ)
(formerly Bell Atlantic and GTE) (USA) and Dallah Al Barakah Group (Saudi
Arabia). For further information, visit www.flagtelecom.com.

      

 Statements contained in this Press Release which are not historical facts
 may be forward-looking statements, as the term is defined in the Private
 Securities Litigation Reform Act of 1995. Such forward-looking statements are
 subject to risks and uncertainties which could cause actual results to differ  
 materially from those currently anticipated.