Level 3 Acquires Sprint’s Wholesale Dial Internet

October 1, 2004 - (HostReview.com) - Level 3 Communications, Inc. (www.Level3.com) today announced that it has acquired the wholesale dial Internet access business of Sprint Corporation (www.sprint.com).

"Level 3 has established a uniquely strong position in the wholesale dial access market, thanks in large part to the inherent efficiency of our proprietary softswitch platform," said Sureel Choksi, president of softswitch services for Level 3.

Level 3 will pay $34 million in cash to acquire the business, which provides dial-up Internet access to leading ISPs throughout the United States. The transaction will permit Level 3 to expand its industry-leading managed modem footprint into select secondary and tertiary markets not currently served by the Level 3 Network.

Sprint plans to continue providing dial IP services to its enterprise and small-business customers as part of its remote access service product offering. Under a separate agreement, Level 3 will provide Sprint with wholesale dial IP network services in support of this service.

"Sprint will work to ensure a smooth transition for its wholesale dial Internet customers who are included in this transaction," said Howard Janzen, president of Sprint Business Solutions. "While the wholesale dial access business is not a core focus for Sprint, this transaction also will provide a basis for Sprint to continue to offer its broad portfolio of integrated remote access services to enterprise and small-business customers."

Level 3 and Sprint have entered into a transition services agreement for the migration of customers onto the Level 3 Network, which Level 3 expects to complete in mid-2005. During the migration period, a portion of the cash collected from these customers will be treated by Level 3 as a reduction in purchase price, as opposed to revenue, as required by Generally Accepted Accounting Principles.

"Over the past two years, we have successfully acquired and integrated network assets from dial-access service providers such as McLeodUSA, Genuity and ICG," said Kevin F. Bostick, Level 3 senior vice president of softswitch services.

Sprint is a global integrated communications provider serving more than 26 million customers in over 100 countries. With more than $26 billion in annual revenues in 2003, Sprint is widely recognized for developing, engineering and deploying state-of-the-art network technologies, including the United States' first nationwide all-digital, fiber-optic network and an award-winning Tier 1 Internet backbone.

Level 3 (Nasdaq:LVLT) is an international communications and information services company. The company operates one of the largest Internet backbones in the world, is one of the largest providers of wholesale dial-up service to ISPs in North America and is the primary provider of Internet connectivity for millions of broadband subscribers, through its cable and DSL partners.