PEMBROKE, Bermuda -- TyCom Ltd. (NYSE: TCM; BSX: TCM) and FLAG Telecom (Nasdaq: FTHL; LSE: FTL) today announced FLAG Telecom's withdrawal as co-developer of a high-speed, high-capacity optical transpacific ring, as FLAG Telecom did not obtain financing on satisfactory terms. The news follows an earlier announcement that the companies had agreed in principle to a joint development arrangement to build the TyCom Transpacific/FLAG Pacific-1 network. TyCom will proceed alone with deployment of the system as originally planned. The ready-for-service date of TyCom Transpacific remains unchanged. The system is scheduled to handle commercial traffic beginning in the second calendar quarter of 2002. The system, which TyCom began building earlier this year, will be approximately 24,100 kilometers long and will connect Japan to the West Coast of the United States, then return to Asia via Hawaii and Guam. The 8-fiber pair architecture, using both 64- and 96-channel DWDM transmission technology, will provide a state-of-the-art system having a design capacity up to 7.68 terabits/second. The TyCom Global Network (TGN) will also connect to other Asian countries including South Korea, Philippines, China, Singapore, Taiwan and Hong Kong, and link all pan-Asian and transpacific segments into the TGN system. TyCom, through its Seahorse program, will continue to provide marine maintenance services on FLAG Telecom's transatlantic system, pursuant to a contract entered into earlier this year. TyCom Ltd.