HAMILTON, Bermuda -- Pakistan is set to open up as a hub for Internet access following a unique deal struck between a subsidiary of FLAG Telecom Holdings Ltd. (Nasdaq: FTHLQ; LSE: FTL), a leading global network services provider and independent carriers' carrier, and the state operator, Pakistan Telecommunications Company Ltd (PTCL). The building and operation of Pakistan's first VPoP (Virtual Point of Presence) will initially offer Pakistan-based businesses MBS (Managed Bandwidth Services) and IP Transit services, providing high quality Internet access between Karachi, Fujairah and New York and connectivity to PoPs in Europe and the US. Service is expected to be in operation by the end of May 2002 with the new found reliability of access enabling Pakistan's business sectors to tap directly into the international Internet market for the first time. Commenting on the agreement, Mr. Walid Irshaid, regional vice president of Middle East for FLAG Telecom said, "This partnership between PTCL and FLAG Telecom brings the benefits of high performance and cost effective global connectivity directly to businesses in Pakistan. It represents a huge opportunity for both companies to develop business by serving the needs of the expanding IT and Internet sectors." FLAG Telecom