Global Crossing to wire Asia

BANGALORE, September 9: Global Crossing Ltd. is collaborating with

Microsoft Corp and Japanese Internet firm Softbank Corp to build a

$1.28-billion land and undersea telecommunications network in Asia, taking

advantage of an anticipated explosion in Internet use across Asia.

The 17,700-kilometer network, to be named East Asia Crossing, will link

Japan, China, Singapore, Hong Kong, Taiwan, South Korea, Malaysia and the

Philippines and connect them to Global Crossing’s fibre optic network

serving North America, Europe and South America. Global will operate the

network, which will give Asia access to high-tech telecommunications

services such as electronic commerce. Global recently agreed to buy No 5

US long-distance telephone company Frontier Corp for about $9 billion in

stock to move beyond its core fibre optic network building business to

become a provider of a broad range of telecommunications services.

Softbank has branched out from its original business of computer

software publishing and taken stakes in more than 100 Internet-related

firms across the globe, including Yahoo! Inc. For Microsoft, the venture

marks another step in its plan to develop relationships with companies

that can provide high-speed telecommunications services and software. The

venture calls for the three companies to form a new entity called Asia

Global Crossing, which will eventually be taken public, they said.

Additional local partners may be brought into the venture. Global Crossing

initially will own 93 per cent of the new company, with Redmond,

Washington-based Microsoft and Softbank each owning 3.5 per cent. When the

fair market value of Global exceeds $5 billion, the ownership interest of

Softbank and Microsoft will increase to a maximum of 19 per cent each at a

valuation of $7.5 billion and above.

Beyond the initial installation of the East Asia Crossing network,

Global , Microsoft and Softbank intend their joint venture to expand both

subsea and terresrial fiber optic buildouts throughout an area that

extends