Colt Telecom Group plc Announces Results For the Three and Nine Months Ended 30 September 1999 - 3rd qtr 1999 - Company Financial Information

Cambridge Telcom Report, Nov 15, 1999

Commenting on the results, COLT Telecom Group plc Chairman Jim Curvey said:

"COLT continued to achieve strong growth across all markets and I am particularly pleased to announce that the Group was EBITDA positive for the quarter.

"Turnover for the quarter of 104.5 million pounds Sterling increased by 71% over the third quarter last year and by 11% over the second quarter of 1999. Gross profit for the quarter of 21.1 million pounds increased by 82% over the third quarter last year and by 17% over the second quarter of 1999. Turnover and gross profit for the nine months were 283.6 million pounds and 55.0 million pounds, respectively, increases of 99% and 105% over the first nine months of 1998.

"The success of our pan-European expansion is reflected in our revenue mix with 55% of turnover being generated in continental European markets compared with 39% in the same quarter last year. We now have over 3,200 buildings directly connected to our networks and for the first time we carried over 2 billion switched minutes in a single quarter, with over 1 billion minutes in the UK and over 500 million in Germany. We installed 625,000 private wire VGEs during the quarter bringing the total at quarter end to nearly 3 million.

"We are seeing an acceleration in the rate of growth in demand for higher bandwidth data services, including internet services. This is reflected in the growth of private wire sales. It took 5 years to sell our first million private wire VGEs, less than 9 months to sell the second million, and after only 4 months we are approaching our third million."

Paul Chisholm, COLT's President and Chief Executive Officer added: "Excellent progress is being made on all fronts. Not only is COLT EBITDA positive overall but our operations in Zurich have been exceptionally strong, achieving positive EBITDA after only 16 months in operation, well ahead of expectations. Zurich joins the other COLT positive EBITDA cities of London, Frankfurt and Paris. In aggregate, our 7 city-markets in Germany were also EBITDA positive for the quarter.

"We continue to improve the quality of our revenue mix with end-user and internet customers accounting for more than 66% of switched turnover in the quarter compared with 59% in the third quarter last year. Private wire services now account for 34% of turnover compared with only 26% in the same quarter in 1998.

"We continue to expand our presence across Europe. COLT is providing service in 18 cities in 9 countries with new networks in Rotterdam and Marseilles under development and planned to be operational at year-end. During 2000 we plan to launch service in a further 4 to 6 new markets including Hannover, Rome, Turin and Stockholm. Over 50% of the duct construction of the 2,600 km German segment of our pan-European inter-city network has been completed.

"As well as expanding and enhancing our network infrastructure we continue to develop and roll-out new services. COLTInternet was launched in Italy, Spain and Switzerland during the quarter and is now available in 8 countries. We are positioning COLT to be a leader in the high growth web hosting market with work underway to expand our current web hosting capability by developing over 150,000 square feet of dedicated hosting facilities in Amsterdam, Brussels, Frankfurt, London, Madrid and Milan.

"COLT's success has been built on excellent customer service, innovation and competitive prices. This continues to be recognised by our customers across Europe. Most recently, in France, COLT was ranked number one over a wide range of key customer satisfaction indicators by CIGREF, the French corporate telecommunications users association."

* THIRD QUARTER HIGHLIGHTS

* Turnover up 71% to 104.5 million pounds

* Gross profit up 82% to 21.1 million pounds

* COLT EBITDA positive

* Germany and Zurich EBITDA positive for quarter, Zurich EBITDA positive
in record 16 months

* 55% of turnover generated in continental European markets

* 34% of revenues from non-switched services reflecting demand for high
bandwidth data and internet

* Capital investment of 85 million pounds

* 2 billion switched minutes carried during quarter

* 3 million private wire VGEs installed

* Over 50% of German inter-city duct construction completed

* COLTInternet launched in Italy, Spain and Switzerland -- now available
in 8 countries

* Expanded web hosting facilities under development in Amsterdam,
Brussels, Frankfurt, London, Madrid and Milan

* Customer service award in France
Operating Statistics                          Growth       Growth
(for period or at end of period)          Year on Year   Qtr on Qtr
                      98Q3   99Q2   99Q3   98Q3 - 99Q3  99Q2 - 99Q3
Route kilometres     1,064  1,569  1,710       61%           9%
Buildings connected  1,908  2,837  3,271       71%          15%
Direct customer
 accounts            1,913  2,995  3,624       89%          21%
Switched minutes
 (millions)            955  1,660  2,028      112%          22%
Private
 Wire VGEs   (000)   1,216  2,294  2,919      140%          27%