Flag Telecom Amalgamates With Reliance Gateway

[Chirag 5]

Flag Telecom Amalgamates with Reliance Gateway

· Shareholders vote to approve deal at Special Meeting

· Reliance Group's first international acquisition

Dhirubhai Ambani Knowledge City, Navi Mumbai and London, UK Jan 12, 2004

FLAG Telecom, a leading provider of international wholesale network transport and communications services, today announced that the company has amalgamated with Reliance Gateway. At the special shareholders meeting held in New York today, over 88.8% of company's shareholders were represented, and the votes cast were unanimously in favour of the proposal to amalgamate. With this positive vote, all conditions for the closing of the Amalgamation were satisfied allowing the amalgamation to become effective immediately following the meeting.

Speaking after today's meeting, Patrick Gallagher, Co-Chairman and CEO, FLAG Telecom, said: "The outcome of today's vote is highly significant for both companies. For Reliance, it marks a major step towards its vision of establishing the Reliance group of companies as a world-class global telecommunications player. For FLAG, it brings a strong base for future growth and opportunities to drive forward its strategy while contributing to the Reliance Group vision."

"FLAG brings both a unique global network footprint and a wealth of international experience, while Reliance already provides a state of the art telecommunications backbone throughout India. As a Reliance company we will continue to deliver customer value through the leverage of our existing network, supported by focused strategic investments that maintain our competitive advantage," he added.

Amit Khanna, Reliance Infocomm, said: "FLAG's global fibre optic network will complement our existing next generation digital network in India and enable us to serve our customers worldwide more effectively by offering end-to-end solutions. FLAG has an excellent reputation in the international marketplace and will retain its own brand identity going forward. FLAG's people have shown unwavering professionalism and enthusiasm. By sharing the best practices, processes and experience between the Reliance Group of companies we will become the carrier of choice for all international, as well as domestic, services."

Advisors to Reliance on this transaction are Davis Polk & Wardwell, legal advisors and Deutsche Bank, financial advisors. Advisors to FLAG Telecom are Akin Gump Strauss Hauer & Feld LLP, legal counsel and Houlihan Lokey Howard & Zukin (Europe) Limited, financial advisors.

About Reliance Infocomm

Reliance Infocomm Ltd.,.India's largest mobile service provider, is a part of the Reliance group founded by Shri Dhirubhai H. Ambani (1932-2002). Reliance Infocomm has established a pan-India, high-capacity, integrated (wireless and wireline) and convergent (voice, data and video) digital network, to offer services spanning the entire Infocomm value chain - infrastructure, services for enterprises and individuals, applications and consulting. The Reliance Group is India's largest business house with total revenues in the financial year ended March 2003 of Rs 800 billion (US$ 16.8 billion), cash profit of over Rs 98 billion (US$ 2.1 billion), net profit of over Rs 47 billion (US$ 990 million), market capitalisation Rs 974 billion (US$21.7 billion) and exports of Rs 119 billion (US$ 2.5 billion).