New Economist Intelligence Unit Survey Commissioned by Infonet Reports Trend towards Increased Network Service Outsourcing

Business Wire, Oct 28, 2004

EL SEGUNDO, Calif. -- Survey of More Than 85 Senior Executives of Multinational Corporations Offers Insight into Current and Future Plans for Network Service Outsourcing

Global executives report they plan to outsource an increasing amount of their network services in the next three years, according to a new survey conducted by the Economist Intelligence Unit and sponsored by global communications provider Infonet (NYSE:IN).

In the survey, which polled 85 senior executives of multinational corporations, including more than 25 chief technology and chief information officers, a majority of those surveyed reported that their companies still develop and maintain data network services in-house. However, more than two-thirds of respondents reported their companies plan to outsource at least 25 percent of their network services by the year 2007.

Full results of the survey are available at http://www.infonet.com. Other key findings include:

--Converged MultiMedia solutions are prime candidates for outsourcing. Fifty-five percent of all executives polled were either likely or extremely likely to outsource their videoconferencing needs in the next three years, while roughly half (49 percent) said the same about their intent to outsource their Voice over IP (VoIP) service to a managed provider.

--Outsourcing the management of mission critical e-business applications is on the rise. Executives surveyed pointed to a rise in outsourcing of e-business applications such as enterprise resource planning (20 percent today vs. 48 percent in three years), supply chain management (11 percent today vs. 43 percent in three years) and customer resource management (17 percent today vs. 57 percent in three years). In addition, more than 50 percent of those surveyed anticipated a return on investment of more than 25 percent from their e-business application outsourcing.

--Collaboration is key. More than 90 percent of executives surveyed prefer to combine an in-house team with an outsourcing partner, rather than outsource a network service completely.

"As capacity prices have declined in recent years, many multinationals have tended to build their own international data networks on which to run their critical e-business applications," said Jose A. Collazo, chairman, president and chief executive officer of Infonet. "However, as this survey reports, more and more global businesses are realizing the benefits of outsourcing, which include cost savings, reduced IT overhead and the ability to focus on core business areas.

"All in all, this survey validates the trend towards network service outsourcing, a trend that we think will only gain in momentum as companies continue to optimize their value chains by reconsidering what activities are done internally," Collazo continued.

About Infonet

Infonet Services Corporation, known for its quality of service, is a leading provider of managed network communications services for nearly 3,000 multinational entities.

Employing a unique consultative approach, Infonet offers integrated solutions optimizing the complex relationship between enterprise applications and the global network. Extensive project management capabilities are the foundation for the services and solution offerings (broadband, Internet, intranet, multimedia, videoconferencing, wireless/remote access, local provisioning, application and consulting services), positioning Infonet as a single-source partner for multinational entities. In particular, Infonet IP VPN solutions offer multinationals a unique combination of Private and Public IP services as well as a full set of Managed Security and Mobility Services.

Rated "Best in Class" overall in Telemark's survey of Global Managed Data Network Services and Managed IP Services, Infonet also has won "Best Customer Care," "Best Managed Service," "Best Regional Carrier" and "Best Carrier" at the World Communication Awards. Founded in 1970, Infonet owns and operates The World Network(R), accessible from more than 180 countries, and provides local service support in more 70 countries and territories.

Infonet's stock is traded on the New York Stock Exchange under the symbol "IN." Additional information about the company is available at www.infonet.com.

Safe Harbor Statement: Infonet may have made forward-looking statements in this release. These statements, if any, are based on information available to the company as of the date of this release and Infonet undertakes no duty to update the information to take account of later events. The accuracy of our forward-looking statements will also be affected by the strength of the market for Infonet products and services, competition, the timely transitioning of new business opportunities to Infonet's network, and the effect of currency fluctuation. Investors should bear these risk factors in mind as well as those elaborated on in Infonet's 10-K, 10-Qs and other recent filings made with the U.S. Securities and Exchange Commission. These documents are available through the investor relations portion of Infonet's web site at www.infonet.com.