KPNQwest Doubles Revenues, Deepens Losses

[London, ENGLAND] European communications company KPNQwest
announced Thursday that its 2000 revenues were up 103 percent
over those in 1999, while losses also doubled from EUR 69.0 million
(US $64 million) to EUR 138.6 million (US $129 million).

Anyone getting a sense of déjà vu will
recall that Wednesday’s figures from Germany’s T-Online showed
revenues up by 86 percent with losses of US $116.5 million.

Jack McMaster, president and chief executive of KPNQwest, said
his company had not only recorded substantial revenue growth
and built its market share across Europe, but at the same time
had completed the biggest phase of its pan-European fiber optic
construction project.

KPNQwest’s number of business Internet accounts grew by
31 percent over 1999 to over a hundred thousand. It also
saw a fourfold increase in demand for its hosting and other
CyberCentre services, major deals with companies such as Nokia,
Atos Origin and Fast Search & Transfer helping to swell the
figures.

Virtual Private Networks (VPNs) were one of KPNQwest’s biggest
successes, the company signing over 80 pan-European contracts
since announcing the service in September 2000.

In fact, by the end of 2000, KPNQwest had grown its Global Accounts
business from zero in 1999 to annualized revenues of over EUR 125
million (US $116 million), serving over 200 customers.

One of KPNQwest’s biggest deals recently has been the sale to Dell
Computer of a 21-site IP VPN linking Europe, South Africa and the
United States. This Dutch-U.S. venture, announced at the beginning
of January, is said to be the largest of its type.

In summary, KPNQwest’s total revenue for the twelve-month period
ended December 31, 2000 was EUR 461.6 million (US $429.3 million).
Its fourth quarter revenue was EUR 144.5 million (US $134.4 million),
an increase of approximately 78.4 percent compared to the same period
in 1999.

Willem Ackermans, executive vice president and chief financial officer,
called it a “strong financial performance in all of Europe’s data
growth markets.”

“Furthermore, our recent successful high yield bond offering of EUR
500 million will give us the additional flexibility to continue the
growth trajectory we demonstrated in 2000 towards EDITDA breakeven
by the end of 2001,” added Ackermans.

The promised land of EDITDA breakeven — non-negative net income
before depreciation, amortization, interest expense and income taxes
— is one that many European Internet companies will be seeking in
2001. KPNQwest is among those likely to achieve it.

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