COLT Telecom Group plc - Banco Best

of the inter-city network is expected to be operational by late 2000. In addition to the southern European
network development, we plan to construct network facilities in the UK between London, Birmingham,
Manchester and Leeds. The UK network is expected to be operational by late 2000. We are exploring the
possibility of acquiring additional transatlantic capacity.
We also intend to launch Digital Subscriber Line (DSL) based services. DSL encompasses a range of
higher speed access techniques. The technology enables the local copper loop to be enhanced into a high speed
digital connection for carrying data. Our initial focus for the deployment of DSL services will be in the
German, Dutch, French and UK markets. Using DSL will allow us to extend the range of services we can
offer to our large corporate customers as well as expand our addressable market for services to smaller and
medium sized companies. We expect to launch our first DSL services by the end of 2000. Full deployment of
DSL is subject to regulatory developments.
We also intend to make significant additional investment in internet-related services. This investment
could include expanding our internet hosting and housing facilities, developing intranet services providing
connectivity for corporations on a local, national and international scale and establishing internet points of
presence (POPs). We believe that there may be opportunities for acquisitions which could increase the speed
of our growth in this area.
We also intend to continue to expand our presence in the metropolitan markets in Europe and, by the end
of 2001, we plan to have completed networks in a total of 30 to 32 cities. In addition to this continued
expansion, we may widen our geographic coverage in selected markets by establishing points of presence
(POPs) in additional smaller cities without building networks.
Prior Financings and Financing Plan
As part of our reorganisation in 1996, we issued Junior Subordinated Debentures due 15 January 2008,
which have been converted into ordinary shares of our company. Also in 1996, we concluded our initial public
offering of ordinary shares and a public offering of units consisting of 12% Senior Discount Notes due 2006
and warrants to purchase ordinary shares.
In 1997, we completed public offerings of:
• ordinary shares,
• 10 1/8% Senior Notes due 2007, denominated in British pounds sterling, and
• 8 7/8% Senior Notes due 2007, denominated in deutschmarks.
In 1998, we completed public offerings of:
• ordinary shares,
• 7 5/8% Senior Notes due 2008, denominated in deutschmarks and
• 2% Senior Convertible Notes due 2005, denominated in deutschmarks.
In March 1999, we completed private placements of:
• ordinary shares and
• 2% Senior Convertible Notes due 2006, denominated in euros.
We believe the proceeds of the offering described in this offering memorandum and our concurrent
ordinary share and convertible note offerings and our existing cash resources, together with internally
generated funds, will adequately finance our planned expansion and our expected operating losses for
approximately 27 to 33 months. After that time, we will require additional funds. If we enlarge the scope of
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