Saudi Telecommunications Company (STC) Purchases 4 X STM-1 (620mbps) Broadband Capacity On FLAG Europe-Asia Cable System

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Saudi Telecommunications Company (STC) Purchases 4 X STM-1 (620mbps) Broadband Capacity On FLAG Europe-Asia Cable System

Largest Single Capacity Purchase to Date On any Cable Landing in the Middle East

February 14, 2000


Jane Windsor,

Tel: +44 207 317 0811

Fax: +44 207 317 0808
M: +44 777 55 23 156

LONDON, FLAG Telecom (Nasdaq: FTHL; LSE: FTL), a leading independent global carriers' carrier, today announced that Saudi Telecom has purchased 4 x STM-1 level (620 Mbit/s) capacity between Jeddah and New York. The capacity will run from Jeddah to the UK on FLAG Europe-Asia and then on to the USA using leased capacity arrangements provided by FLAG Telecom, pending availability of STC's own capacity on FLAG Atlantic-1. This capacity will be
used to carry advanced communication services including high-speed data, broadcast and primarily Internet traffic which is growing rapidly in Saudi Arabia and throughout the region.

FLAG Telecom owns and operates the FLAG (Fiberoptic Link Around the Globe) Europe-Asia cable system, stretching 28,000 km from the UK to Japan, and provides an innovative range of products and services to the international carrier community and Internet Service Providers. Terms of the multi-million dollar agreement were not disclosed.

The FLAG Europe-Asia cable, with 16 operational landing points in 13 countries, directly connects landings in Japan (2) and the UK, via the Atlantic Ocean, Mediterranean Sea, Red Sea,
Indian Ocean, the South China Sea, and the Pacific Ocean. The landing station at Jeddah was
declared ready for service in July 1999. The cable is the longest private cable system ever built
and provides high-capacity digital services to international carriers, resellers, and ISPs.

Andres B Bande, Chairman and CEO of FLAG Telecom, said: "The concept of the FLAG
Europe-Asia cable was founded in the Middle East, a region that is seeing an increasing need for
high-capacity, error-free transmission as data takes over from voice as the most usual means of
communication. It is a key region for us and we are delighted to have been able to provide this
capacity for one of our latest landing partners. FLAG Europe-Asia was the first SDH
intercontinental cable to land in Saudi Arabia. We believe the size of capacity purchased
underlines the importance of fibreoptic cables in today's bandwidth hungry market, and the
confidence of Saudi Telecom in FLAG Telecom to deliver a robust service."

The FLAG Europe-Asia cable, along what is considered the most difficult route of any cable
system in the world, took 27 months and required 4,000 permits to install. It spans many of the
world's fastest growing economies and offers direct connectivity to over 75 percent of the
world's population. Privately financed at a cost of $1.6bn, the cable is designed to meet the
growing demand for international communications services, providing carriers with a world-
class broadband superhighway. Currently the company has over 90 telecommunications
operators as customers, including most of the world's top carriers.

FLAG Atlantic-1, the company's latest venture now under construction, is designed to be the
world's first terabit/s transoceanic dual cable system offering fully protected services between
Paris, London and New York. The system will be a triple-ring, dual cable system, connecting the
East Coast of the United States, with nodes in the heart of New York to two landings in Europe -
one in Brittany, France and the other in Cornwall, UK, with city nodes in Paris and London.
Customers will be able to add traffic either at the
shore landing stations or the city nodes. The planned three self-healing rings are designed to
provide secure end to end circuits to most of the major world business centres. FA-1 will connect
to the FLAG Europe-Asia cable system in Cornwall, UK.

The single FLAG network operations centre (FNOC) is located in the central time zone of the
Europe-Asia route, at Fujairah in the United Arab Emirates. The FNOC manages all maintenance
activity, performance monitoring and activates capacity on demand. With the addition of FLAG
Atlantic-1, which will be built and operated as a 50:50 joint venture with GTS, the network will
extend to 42,500 route kilometers, enough to encircle the globe.

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 due to a number of factors, which include,
but are not limited to: the Company's ability to achieve revenues from products and services that
are in the early stages of development or operation, the Company's completion of FLAG
Atlantic-1 within budget and on time, the Company's ability to deploy sophisticated technologies
on a global basis, the Company's ability to upgrade and expand its network and respond to
customer demands and industry changes, regulatory enactments and changes, competition and
pricing pressure, rapid technological change, adverse foreign economic or political events and
other factors that are discussed in the Company's Registration Statement on Form F-1 filed with
the Securities and Exchange Commission.

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