PSINet buys capacity on FLAG to link Internets in Japan, China, Southeast Asia, India, Middle East, Europe and the UK

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PSINet buys capacity on FLAG to link Internets in Japan, China,
Southeast Asia, India, Middle East, Europe and the UK


PSINet buys capacity on FLAG to link Internets in Japan, China,
Southeast Asia, India, Middle East, Europe and the UK

First ISP to Own Global Fiber Loop for Commercial Internet

January 12, 1999

Media contact:  

Jane Windsor, FLAG Telecom Limited

Tel: +44 171 317 0811
Fax: +44 171 317 0808

Michael P Binko, FLAG Telecom Limited
Tel: +1 703-904-4285

Kelli Harrington Nemer, FLAG Telecom Limited
Tel: +1 703/375-1245

London, Herndon, VA and Tokyo -- PSINet Inc.
(NASDAQ: PSIX), the first and largest independent commercial Internet
Service Provider (ISP), today announced it has completed an agreement
with FLAG (Fiberoptic Link Around the Globe) to purchase STM-1 (155
Mbps) fibreoptic network capacity. The FLAG cable stretches over
27,300km, directly connecting Japan and the UK, landing in Korea, China
(2), Malaysia, Thailand, India, United Arab Emirates, Egypt (2), Italy, and
Spain. The network capacity will be used to further integrate PSINet's
operations in Hong Kong, the Republic of Korea, Japan and the entire
Asia/Pacific Region with PSINet operations in North America and Europe
by creating a global network loop. Terms of the multi-million dollar
agreement were not disclosed.

With this acquisition, PSINet's international network becomes the first
independent Internet network to fully circle the globe, serving customers
on three continents. The flexibility of FLAG allows PSINet to purchase
and activate additional capacity quickly and to insert new connections
anywhere along the cable's route toaccommodate PSINet's future

The agreement provides PSINet with an immediate indefeasible right of
use (IRU) on the STM-1 fibre capacity for the expected 24-year life of the
FLAG cable.

"PSINet is committed to meet the exploding commercial demand for
Internet services throughout Europe, North America and Asia/Pacific with
the highest quality network and best products in the industry," said
William L. Schrader, chairman and CEO of PSINet Inc. "PSINet's
ownership of the fibre network and data centres worldwide, reduces our
costs, increases our quality control and enables PSINet to cost-effectively
provide customers with their mission critical needs. The new FLAG
bandwidth reinforces this strategy, allowing PSINet to easily expand
within Asia/Pacific, connect directly to our owned fibre on the Japan-US
Cable in Miura, Japan, and specifically enables further growth by
acquisition of other companies in international markets connected by the
FLAG cable."

This new fibre capacity and PSINet's previous trans-pacific capacity
purchases provides a redundant capacity interconnecting its existing
Asia/Pacific operations in Japan, Hong Kong, and the Republic of Korea.
Further, it increases PSINet's provisioning flexibility for a variety of
Internet connection services and business applications such as voice, fax,
Web hosting, leased-line access services, and Intranets. Redundancy
provides PSINet customers with improved performance, reliability, and
security, which are supported by PSINet's strong service level agreements

The FLAG agreement is PSINet's seventh fibre capacity acquisition in the
past 12 months and is expected to be completely operational within the
first quarter of 1999.

"Our primary growth targets are the top 20 global markets,"
said Harold (Pete) Wills, president and chief operating officer of PSINet
Inc. "The competitive advantages that these network assets offer
PSINet, combined with the attractive financial impact of fibre ownership
and our outstanding suite of Internet services, supports our aggressive
growth in an increasingly competitive market."

Andres Bande, chairman and chief executive officer, FLAG Telecom,
said "This significant contract with PSINet, the world's largest
independent commercial ISP, underlines the importance of the Internet in
territories where FLAG lands. Our newly established New York office is
ideally placed to work closely with our existing and emerging US
customers as they build global networks to satisfy the bandwidth
demands tomorrow predicts."

Headquartered in Herndon, VA, PSINet is a global facilities-based
Internet Protocol (IP) data communications carrier focused on the business
marketplace. PSINet offers a broad set of high-speed corporate LAN
connectivity services supporting managed security and guaranteed
Internet, intranet, electronic commerce, Web hosting services, and services
for other carriers and ISPs. PSINet operates an international state-of-the-
art frame relay and ATM-based, IP-optimized network consisting of more
than 500 points of presence (POPs) around the world serving primary
markets in Belgium, Canada, France, Germany, Hong Kong, Italy, Japan,
the Netherlands, Republic of Korea, Switzerland, the United States, and
the United Kingdom. PSINet information can be obtained by e-mail at

The FLAG cable system, with 14 operational landing points in 11
countries, provides high-capacity digital services to international carriers,
resellers, and ISPs. The cable route spans many of the world's fastest
growing economies and offers direct connectivity in regions that contain
75 percent of the world's population. Privately financed, FLAG is
designed to meet the growing demand for international communications
services, providing carriers with a world-class broadband superhighway.


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