10/15/01

XO Launches Next Generation Service Bundles With Customized VPN Capabilities

XO Unveils Customized VPN Bundles Designed to Offer Enterprise-Scale Security and High-Performance Reliability Over a Shared Infrastructure

RESTON, VA - XO Communications, Inc. (Nasdaq:XOXO), one of the world's fastest growing providers of broadband communications services, today introduced a set of Virtual Private Network (VPN) service bundles as the latest addition to its packaged telecommunications services designed to make buying decisions simpler, more flexible and less expensive for small, medium and enterprise level telecommunications customers.

The XO VPN bundles include Virtual Private Networking security capabilities and a range of choices for Internet access speed connections all in one package. This combination is expected to give customers the ability to save money, by using the shared public Internet infrastructure for data transmission between locations, while providing both security and high-performance reliability for business-critical, wide-area networking activities.

"The adoption of VPN technology is expanding significantly as companies begin to realize the cost advantages gained through a shared and protected network environment," said Nancy Gofus, Executive Vice President of Marketing and Customer Care for XO Communications. "The success XO has experienced with the XOptions packages over the past year has demonstrated that customers want simple and flexible solutions for their telecommunications needs. Our newest package, the XO VPN bundle allows businesses to securely and reliably communicate with their offices, employees and business partners via one flexible solution for deploying their intranet, extranet or remote access needs."

The unique capability of a VPN allow companies to incorporate the ubiquity, scalability and cost structure of the Internet with the security and performance of a private network are making VPNs more and more popular with businesses of all sizes. A recent industry study estimated that by the end of this year 45 percent of companies with 100 to 1,000 employees will use IP VPNs for at least some network connections, and 68 percent of companies with more than 1,000 employees will use IP VPNs that connect corporate buildings via the Internet.

The XO VPN bundles are designed to allow customers to create turn-key networking solutions by incorporating common VPN components with a choice of high-speed Internet access solutions. These choices include a stand alone VPN package, VPN with DSL, and VPN with dedicated Internet access (DIA) options available at T1 or T3 speeds.

Another important element of the XO VPN bundle is a pre-packaged security solution, which includes all of the main networking firewall components that most customers require for network security. The offering includes encryption technology with the capacity to accommodate large-scale network needs allowing customers to scale up to 2,000 user "tunnels" per customer premise equipment at DES and 3DES encryption levels. For added security, XO also provides demilitarized zones (DMZ) for customers looking to build an additional security zone for servers between the customer network and the public Internet. The technology is managed and monitored by XO and statistics are reported to the customer.

XO VPN bundles also allow qualified customers to integrate remote VPN sites in locations that are not directly connected to the XO network, or to accommodate cases where customers may have existing access contracts with other telecommunications providers. For remote access, companies may choose to use XO Corporate Dial for their remote users, or continue with an existing service provider. Each bundle is available in a rent or purchase option, with all the necessary equipment for the VPN, onsite installation, ongoing 24x7 management and VPN reporting fully incorporated.

XO VPN solutions that connect directly to the XO facilities based network, route all traffic via SONET protected OC-12 optical network fiber rings. This state-of-the-art core backbone network provides for faster content delivery (low latency, high throughput) and increased reliability (minimal downtime) of customer traffic. Competitive Service Level Agreements are offered for the on-net communications of any XO VPN product that employs Dedicated Internet Access. By choosing VPN industry leading vendors such as Cisco (Nasdaq:CSCO) and SmartPipes (see related release), the XO VPN bundles avoid having to make a costly tradeoff between network performance and security.

"Increasingly, companies are looking for tools to improve their business performance through the use of the Internet, and VPNs are emerging as one of those tools. However, in order to gain the full benefits of VPNs and ensure appropriate data security requires a level of knowledge and skill many businesses, particularly small businesses, do not possess or cannot afford," said Michael Suby, Senior Research Analyst at Stratecast Partners. "In developing a fully managed VPN solution in partnership with Cisco and SmartPipes, we view the XO VPN as a continuation of the success of XOptions in offering simple, economical, and complete communication solutions to businesses."

About XO Communications
XO Communications is one of the world's leading providers of broadband communications services offering a complete set of communications services, including: local and long distance voice, Internet access, Virtual Private Networking (VPN), Ethernet, Wavelength, Hosting and Integrated voice and data services.

XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships in the United States. XO currently offers facilities-based broadband communications services in 63 markets throughout the United States. The Company is also one of North America's largest holders of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities.

For more information contact:

Jenna Dee / XO Communications
Media and Industry Analysts
408-817-2297

Lisa Miles / XO Communications
Financial Analysts
703-547-2440