GST Telecommunications and Covad to Deliver Voice and Data over DSL; Integrated Service Offerings Target $45 Billion Small Business Market - Company Business and Marketing

Cambridge Telcom Report, August 2, 1999

GST Telecommunications, Inc. (Nasdaq:GSTX), a leading Integrated Communications Provider (ICP) in California and the western United States, has announced it has entered into a second agreement with Covad Communications (Nasdaq:COVD) under which GST and Covad will develop integrated voice and data services over digital subscriber line (DSL). In entering the agreement, GST becomes one of the first telecommunications service providers in the industry to signal its intentions to provide integrated voice and data services over DSL.

In June, GST announced a separate agreement with Covad, under which Covad will provide DSL services for GST in GST's major metropolitan markets. Under the latest agreement, Covad will work with GST to develop specific voice and data service offerings over DSL, allowing small businesses to utilize one DSL line for up to 16 integrated voice and data channels.

"By expanding our alliance with Covad, GST will be able to offer its extensive voice services over the same lines deployed for Internet access," stated Joe Basile, president and chief executive officer of GST. "Integrated DSL services are a cost-effective alternative for small businesses to take advantage of new network capabilities which can help make them more competitive. DSL gives GST a broader geographic reach within our major metropolitan markets, and is another way for us to bypass the incumbent local exchange carriers (ILECs), allowing us to provide faster provisioning intervals, more responsive customer service, and lower prices than those available when working through an ILEC connection."

"Although the technology behind the service is impressive by any standard, voice over DSL is really about leveraging a DSL line to provide voice products with better service delivery and better customer service," added Robert Roblin, executive vice president of Marketing for Covad. "Our research indicates that small businesses have strong dissatisfaction with the ILECs. We aim to provide alternatives for voice and data services to small businesses that have never had a choice of providers."

The addition of integrated voice and data services over DSL allows GST to further penetrate the $45 billion small business telecommunications market. Sources within the Company estimate that the new partnership will provide exposure to as many as one million additional small businesses, representing up to $4 billion in potential voice service revenues. The agreement also extends the reach of GST's Virtual Integrated Transport and Access (VITA) network, a converged network utilizing a combination of IP, packet, frame, and cell technology, along with next-generation ATM-based switching equipment. The VITA network allows the Company to provide a full suite of integrated communications and high-bandwidth data solutions on a single converged network, at substantial savings over using separate voice and data network backbones.

GST and Covad envision service trials of voice and data services over DSL by the end of 1999. In April, GST announced the successful completion of DSL service trials with Covad in the San Francisco Bay area, providing business customers with Internet access at speeds 12 to 50 times faster than those available via Integrated Services Digital Network (ISDN)-based access.

GST Telecommunications, Inc., an Integrated Communications Provider (ICP) headquartered in Vancouver, Wash., provides a broad range of integrated telecommunications products and services including local dial tone, Internet, long distance, and enhanced data services throughout the United States with a robust presence in California and the West. Facilities-based GST continues to focus on its western regional strategy by anchoring its next generation networks in local markets and connecting them via long haul fiber networks. Visit GST's Web site at www.gstcorp.com.