Interoute and virtuebroadcasting Partner to Deliver Largest Broadband Internet Video Streaming Network in Europe

LONDON March 12, 2001 - Europe's leading Internet broadcaster virtuebroadcasting Ltd today announced a partnership with Interoute, the telco behind Europe's largest and fastest fibre-optic network. The alliance will see Interoute invest 12 million euros in virtuebroadcasting who in turn will provide media streaming services across its entire network.

The partnership will allow - for the first time - true, television quality video over the internet within reach of 134 million households* throughout Europe and 168,000 of Europe's major businesses.

Paul Hodgins, CEO of virtuebroadcasting said, "We're delighted to announce this partnership with Interoute. It is a strong endorsement of the ability virtuebroadcasting has shown over the last two years to deliver quality broadcast services to our clients. Coupled with Interoute's unrivalled network, this will secure our position in providing Europe's largest media and corporate groups a pan European video delivery network of the highest quality. Today's announcement is a huge step forward in the development of valid and sustainable revenue models for video distribution over the Internet, which will drive the demand for broadband. The combination of virtuebroadcasting's pool of major content suppliers with Interoute's next generation delivery network should be very welcome news to every European broadband access provider."

virtuebroadcasting is a London based market leader in the field of internet broadcasting and streamed content distribution. The company recently announced a strategic investment by EMI, making virtuebroadcasting the chosen Internet broadcaster for EMI's UK based labels. Past credits include broadcasts of Paul McCartney at The Cavern in Liverpool, and Madonna from The Brixton Academy in London, and Popstars with Granada Media.

Ohad Finkelstein, Chairman and CEO of Interoute, said: "Our investment and partnership with virtuebroadcasting signifies our commitment to developing the next generation of internet broadcasting. Outside of the US, the market for streaming video is wide open. With our state-of-the-art network and virtuebroadcasting's leadership in hosting and distribution, we are well positioned to exploit this opportunity. Interoute's strategy is to build a network platform that can deliver the next generation of bandwidth-hungry applications. Internet broadcasting and streamed content distribution is a key part of this strategy."

Hodgins states the investment funds are earmarked for virtuebroadcasting's expansion within Europe and the development of next generation services and products.

(* All figures provided by Eurostat, 1999)

About virtuebroadcasting
virtuebroadcasting is Europe's most experienced and advanced broadband streaming provider for both Media and Corporate Communication solutions, including rights management and content syndication, corporate intranet communications, digitisation, and live and on-demand interactive production. Established in 1998, the Company's head office is in London with subsidiaries in Canada, Australia and Mexico. More than 200 customers use virtuebroadcasting including the EMI Group, Granada Media, and News International. Past entertainment broadcasts include Madonna from The Brixton Academy in London; and Paul McCartney at The Cavern in Liverpool.

About Interoute
Interoute (www.interoute.com) is a rapidly growing, vertically integrated, pan-European telecommunications company with established operations in 12 European countries and the USA. The company sells a range of telecommunications services, from network infrastructure, such as dark fibre and co-location, to end user services, such as telephony.

Interoute is behind the largest telecommunications project in Europe today - the construction of the i-21 fibre optic network. Once completed, i-21 will be one of the fastest communications networks in Europe, with the capacity to carry over a petabit (a billion megabits per second) of traffic. Phase 1 of the network will connect 46 cities in 9 countries with around 14,500 route (18,000 cable) kilometres of fibre.

The first of eight rings, connecting the UK, Holland and Belgium, is already operational, and all eight will be complete by the middle of 2001.

Interoute is already a major presence in the wholesale voice market, selling to over 70 other carriers and service providers around the world. The company is expanding its portfolio to include managed bandwidth (lit fibre and SDH), Internet (transit and access), virtual private networks (including IP VPN) and network resident applications (including web hosting and integrated voice services).

Customers for these services include other carriers, network operators, Internet and application service providers, and e-commerce companies. Interoute is a privately held company owned by a number of internationally based shareholders, the largest and major shareholder being the Sandoz Family Foundation (www.sandozfondation.ch), one of the world's largest private family foundations.

For further information contact:

Julie Aguilar, tel: 020 7299 7189
[email protected]
at Interoute www.interoute.com

Steve Kane, tel: 020 7831 3113
[email protected]

for virtuebroadcasting
www.virtuebroadcasting.com