Cisco to Provide Russia with High-Speed Residential Internet Access and New IP Services

MOSCOW, Russia, February 16, 2001 - Cisco Systems is to build Russia's first residential broadband Internet access network that will immediately serve more than 3 million users in St. Petersburg and more than 6 million users in Moscow, the company announced today.

IP-Net, a new service provider which is based on Cisco technology, is Russia's first carrier to provide residential users nationwide with high-speed Internet access to a host of new value-added services. The initiative is being organized in conjunction with IP land Ltd, IP-Net's parent company, with project development supported by local administrations in the regions of Russia.

Demand for Internet services in Russia has exploded, with Internet subscriber rates growing from only 1.5 million in 1998 to more about 4 million in 2000¹. Cisco's IP-based network will enable Russia's increasingly sophisticated Internet users to gain high-speed access to leading-edge services including IP-telephony, audio and video broadcasting, audio and video-on-demand, distance learning and telemedicine. Video-on-demand is a critical application in Russia due to the limited choice of traditional TV channels and practically non-existent national cable TV networks.

The scalable architecture and Dense Wavelength Division Multiplexing (DWDM) technology, which will provide subscribers with broadband access at 10 Mbps (with a capability of expansion to 100 Mbit/s and 1 Gbit/s), will allow IP Net to target not only the residential market within each major Russian city, but also enable the carrier to link those cities together.

The metropolitan networks will be interconnected by broadband fiber backbones. A pilot section of the network has been successfully tested in Russia's second largest city - St.Petersburg - and construction of the Moscow-St.Petersburg backbone will be launched in the second half of the year 2001.

"With Cisco's expertise in IP networking and IP-Net's knowledge of the needs and services of the burgeoning and as yet untapped Russian residential market, this is a great opportunity for both companies," said Todd Abbott, Group Vice President Europe, Middle East and Africa (EMEA) Service Provider Sales. "The announcement clearly demonstrates the value of scalable and intelligent IP networking to the telecommunications industry, and shows the growing importance of delivering innovative data-based services to increasingly sophisticated residential customers."

"IP-Net's relationship with Cisco is the critical ingredient in enabling us to provide new and cutting-edge data services to the residential community," said Alexander Afonichev, President of IP-Net. "With the Russian population becoming increasingly reliant on the Internet, providing them with a unique portfolio of value-added IP services is the essential next step."

¹Source:Gallup media www.gallup.ru