ALLEN, Texas -- Xtera, an innovator of optical transport solutions, announced that FLAG Telecom, a leading provider of international wholesale network transport and communications services, is purchasing additional Nu-Wave multi-reach DWDM equipment to respond to a 500-percent increase in orders for wavelength capacity on FLAG Atlantic-1 (FA-1), a multi-terabit/s optical submarine cable. The increase, measured quarter on quarter in the first half of 2005, has been driven by the increased use of broadband services by businesses and customer demand for bandwidth-intensive applications, including video, data and advanced voice services.

Xtera's Nu-Wave multi-reach DWDM system was installed in FLAG's FA-1 backhaul system last year to support anticipated capacity growth, network simplification and demand for high-quality bandwidth required by today's growing broadband applications. Current purchases include add-on devices that provide easy access to the capacity supplied by Xtera's Nu-Wave DWDM.

"FLAG Telecom has a sterling reputation for quality and flexibility which is the driving force behind their substantial quarter-over-quarter growth," said Jon Hopper, CEO of Xtera. "Our 18-month relationship with FLAG Telecom has enhanced their ability to service customers with superior bandwidth for converging applications."

Xtera's unique DWDM technology not only provides three times the capacity of other DWDM systems on the market, but also uses low-loss OADMs to simplify the network while simultaneously increasing its flexibility -- a capability that is paramount in responding to both planned and spontaneous surges in orders.

"We are very pleased to continue our relationship with Xtera," said Peter Boland, SVP of Engineering and Network Planning, FLAG Telecom. "Our initial requirement was to increase capacity and minimize wavelength turn-up time. With the implementation of Xtera's Nu-Wave equipment, all back-to-back terminals in the previous FA-1 backhaul system were replaced with more flexible optical add/drop multiplexers. The result is that 50 percent fewer network elements have to be serviced to fulfill end-to-end FA-1 backhaul orders."

Xtera Communications Inc.