Neptune Communications to Install the Pacific Express Cable Network Connecting the US West Coast to Hawaii - Guam - Japan - Korea - China - Canada

Business Wire, Dec 22, 1997

WASHINGTON--(BUSINESS WIRE)--Dec. 22, 1997--Neptune Communications Corporation Friday announced plans to proceed with the advanced development, construction and implementation of the Pacific Express Cable Network. The Pacific Express Cable Network will connect the Pacific Northwest US to cable landing points in Oahu, Hawaii, Guam, Japan, Korea, and Canada in substantially a self healing ring configuration. Neptune also aspires to include China in the Pacific Express Cable Network.

The Pacific Express Cable Network will be a 4-fiber pair cable system, fully equipped with 80 Gbit/s of design capacity, employing the most advanced submarine fiber optic technology available along its approximately 25,000 kilometer route. The project will be implemented as expeditiously as possible, with service phased in by segments, beginning in the first quarter 1999 and proceeding to completion during the year 2000.

Neptune Communications Corporation, is a privately held, undersea cable project development company, formed by Neptune Global Systems, L.L.C. and The Carlyle Group. The company has rights to US Federal Communications Commission ("FCC") non common carrier cable landing license authorizations for each of the proposed Pacific Express Cable Network landing points identified above, including China. Neptune was formed for the purpose of arranging the financing as well as the planning and development, sales and marketing, implementation, operation and maintenance for a portfolio of state-of-the-art submarine fiber optic cable systems worldwide.

This release coincides with a related announcement earlier today which stated that Neptune Pacific Holdings, Inc., a wholly owned subsidiary of Neptune Communications Corporation, had executed definitive agreements to acquire Pacific Telecom Cable, Inc. and Pacific Telecom Transmission Services, Inc. for approximately $70 million. Pacific Telecom Cable, Inc. ("PTC"), is the US owner, operator and FCC Licensee of the North Pacific Cable ("NPC"). NPC is a joint undersea cable project with International Digital Communications Inc. ("IDC") of Japan and Cable & Wireless plc ("C&W") of the UK. NPC connects Pacific City, Oregon to Muira, Japan and Seward, Alaska and went into service in May, 1991.

"The acquisition of PTC is extremely important to the Neptune strategy and will be the platform for developing the Pacific Express Cable Network. The acquisition consists of the only non- AT&T cable station on the west coast of the US, in Pacific City, Oregon, and includes a fully redundant inland extension system from Pacific City to a gateway operations center in Portland, Oregon," stated Donald J. Schroeder, president and chief executive officer of Neptune Communications Corporation. "The acquisition also includes an international earth station in Oregon and a cable landing station in Seward, Alaska."

"The US Telecommunications Act of 1996 and the implementation of the World Trade Organization Telecommunications Agreement will result in rapid and meaningful deregulation, faster liberalization of international markets, a significantly increasing number of new market entrants, as well as a reduction in international accounting rates," stated Mr. Schroeder. "These market conditions, combined with the increased demand for high bandwidth service applications, especially Internet and other data related services, make this the ideal time to proceed with the Pacific Express Cable Network. The Pacific Express Cable Network is configured substantially in a ring configuration so as to provide the essential restoration and route diversity properties required today by all users of telecommunications services."

"In addition to advanced technology and arranging the necessary financing for the Pacific Express Cable Network, Neptune will offer international telecommunications market participants a menu of capacity acquisition offerings designed to meet the fundamental market need of efficient capital deployment by all market participants." Mr. Schroeder concluded.

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