GTS Announces Strategic Alliance with Cisco; Product and Technology Focus to Deploy Advanced IP Services in Europe over Next 2 Years

Business Wire, May 22, 2000

Business Editors/Hi-Tech Writers

WASHINGTON and LONDON--(BUSINESS WIRE)--May 22, 2000

First Service--GTS and Cisco Bring Voice-over-IP Services

to Europe's Businesses, ISPs and Carriers

Global TeleSystems, Inc. (GTS) (NYSE: GTS; Easdaq: GTSG; Frankfurt: GTS), the leading provider of e-Business and borderless broadband services across Europe, today announced that it has entered into a strategic alliance with Cisco (Nasdaq: CSCO) and will introduce a suite of new Cisco-powered IP services across more than 20 countries in Europe and the United States. The alliance brings together Cisco's global leadership in IP solutions and GTS's expertise in providing pan-European broadband, Internet/IP and e-Business services.

Through the alliance, GTS and Cisco plan to embark on a number of co-marketing and distribution activities, with GTS receiving "Cisco Powered Network" (CPN) status, a quality certification for end-to-end Cisco networking solutions. In addition, Cisco and GTS will work together to expand and develop new channels, which will be able to take advantage of the CPN status.

"Combining Cisco's worldwide leadership in Internet technology and equipment with our own leadership in Internet services enhances GTS's position as the leading Internet company of Europe," commented H. Brian Thompson, GTS's chairman and chief executive officer.

The initial pan-European service offered will be a carrier-class, toll-quality Voice-over-IP (VoIP) service. This service will be available to GTS wholesale, carrier and business customers.

GTS is committed to extending its European Internet service leadership to include toll quality, single-platform Internet services such as VoIP, a market that Datamonitor estimates will generate nearly $1 billion in industry revenues for national and international calls by 20021. With its market-leading pan-European network footprint and market presence, GTS is uniquely able to rapidly introduce seamless pan-European VoIP and other IP and e-Business services.

GTS will promote the CPN status in conjunction with other pan-European IP services, including direct Internet access and IP transit. GTS's Internet and IP services for businesses, service providers and carriers are provided over GTS Ebone. GTS Ebone, already powered by Cisco, is an STM-16/OC-48 optical "layer" on GTS's 17,500-kilometer trans-European network. A Tier-1 network provider, GTS manages a quarter of the European Internet transit market, some 1.6 Gbps of IP interconnections and nearly 10 percent of the Internet's global routing tables.

Amit Pau, GTS's president for e-Business Services, said, "GTS is recognized as the optical and Internet platform of Europe. Extending our current VoIP service on a pan-European scale is a natural step for the company, and partnering with Cisco will enable us to rapidly enter the developing marketplace with the highest quality, pan-European VoIP offering. We will be using IP as the access protocol for business voice and data services across Europe by the fourth quarter of this year."

Paul Mountford, vice president service providers at Cisco Systems EMEA, commented, "Cisco has a leading role in the development of converged voice, video and data solutions for the service provider and enterprise markets. Our alliance with GTS will help introduce converged voice and data services in Europe's explosive marketplace. Through this alliance, GTS - with one of the largest IP-enabled optical networks in Europe and extensive voice experience - should further establish its leadership position."

About GTS (www.gtsgroup.com)

Global TeleSystems is the leading provider of e-Business and borderless broadband services across Europe, serving businesses and carriers with a range of broadband, hosting, Internet/IP and voice services. As an industry leader in Europe, the company has the largest cross-border fiber optic network; the largest Tier-1 IP backbone (GTS Ebone); the most widely deployed pan-European e-Business sales and service staff; and the largest pan-European customer base. GTS's first and most extensive trans-European broadband fiber network includes on-net points of presence in 32 European cities (with plans for 50 cities) and stretches across 17,500 route kilometers (with plans for 25,000 route kilometers) with five city enterprise networks (CENs), providing intra-city bandwidth (with plans for a total of 16). GTS has also announced plans to build an advanced trans-Atlantic dual-cable system in a joint venture with FLAG Telecom. GTS has corporate offices in the metropolitan Washington, D.C., area and European headquarters in London, as well as sales and support offices in 19 countries.

This press release may include forward-looking statements that involve risk and uncertainty. Although the company believes its expectations reflected in such forward-looking statements are based on reasonable assumptions, no assurance can be given that such projections will be fulfilled. Any such forward-looking statement must be considered along with knowledge that actual events or results may vary materially from such predictions due to, among other things, political, economic or legal changes in the markets in which GTS does business, competitive developments or risks inherent in the company's business plan. Readers are referred to the documents filed by GTS with the U.S. Securities and Exchange Commission, specifically the most recent reports filed under the Securities Exchange Act of 1934 and registration statements filed pursuant to the Securities Act of 1933, which identify important risk factors.