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GLOSSARY
BANDWIDTH--The relative range of frequencies, expressed in Hertz (Hz),
analog or bits per second, that can pass over a given transmission medium. The
bandwidth determines the rate at which information can be transmitted through
the circuit. The greater the bandwidth, the more information can be sent through
the circuit in a given amount of time at a given accuracy level.
BITS--The contraction of the term binary digit. It is the smallest unit of
information (data) a computer can process, representing either high or low, yes
or no or 1 or 0. It is the basic unit in data communications.
BPS--Bits per second. The rate at which digital data are transmitted over a
communications path.
CAPACITY--The information carrying ability of a telecommunications facility.
CAPACITY SALES AGREEMENT, CSA--Each agreement for the sale, lease or other
disposition of capacity entered into between the Company and its customers.
CARRIER--A company which provides communications transmission services by
fiber, wire or radio.
CLUB CABLE--The joint undertaking of international telecommunications
carriers that collectively own the entire cable and are responsible for the full
costs of construction, operation and maintenance. Can also be referred to as
"Consortium Cable."
COLLATERAL TRUSTEE--With respect to the period subsequent to January 30,
1998, the International Trust Company of Bermuda Limited (the "Trust Company")
acting as collateral trustee under the New Credit Facility and, with respect to
periods prior to January 30, 1998, the Trust Company acting as collateral
trustee under the Old Credit Facility.
DIGITAL--Describes a method of storing, processing and transmitting
information through the use of distinct electronic or optical pulses that
represent the binary digits 0 and 1. Digital transmission/switching technologies
employ a sequence of discrete, distinct pulses to represent information, as
opposed to the continuously variable analog signal.
DISPERSION SHIFTED FIBERS--Fibers with different internal configuration,
changing the zero total chromatic dispersion point to 1550nm. This is important
on long-haul cable systems because the attenuation (i.e., the logarithmic
decrease in power of the signal) at this wavelength is less than half as much as
at 1300nm.
EMERGING CARRIERS--Newly licensed international carriers usually
characterized by their non-dominant position in their countries'
telecommunications markets.
ESTABLISHED CARRIERS--Government enterprises with monopolies on
international communications in their countries or dominant international
carriers in their country with a substantial market share of international
communications.
FACILITIES-BASED CARRIERS--Carriers who own and operate their own system or
equipment.
FIBEROPTIC--Strands of pure glass along which digital signals, in the form
of modulated light, travel for long distances at the speed of light. The big
advantage that fiber has over copper is that it can carry far more information.
FIBEROPTIC CABLE--A transmission medium consisting of a core of glass or
plastic surrounded by a protective cladding, strengthening material and outer
jacket. Signals are transmitted as light pulses, introduced into the fiber by
light transmitter (either laser or light emitting diode).
GBPS--Gigabits per second, which is a measurement of speed for digital
signal transmission. A gigabit is one thousand million bits.
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GEOSYNCHRONOUS ORBIT--An orbit above the Earth's equator where satellites
circle at the same rate as the Earth's rotation, thereby appearing stationary to
the earth-bound observer.
ISP--Internet Service Provider. A company that provides businesses and
consumers with access to the Internet.
ITU--International Telecommunications Union, established by the United
Nations with membership from virtually every country in the world. Its objective
is to set telecommunications standards, allocate frequencies to various users
and hold trade shows.
KBPS--Kilobits per second, which is a measurement of speed for digital
signal transmission. A kilobit is one thousand bits.
LANDING COUNTRY--Each jurisdiction in which the FLAG System is landed or is
planned to land. The Landing Countries are: the United Kingdom, Spain, Italy,
Egypt, Jordan (scheduled for July 1999), Saudi Arabia (scheduled for July 1999),
the United Arab Emirates, India, Malaysia, Thailand, Hong Kong, China, Korea and
Japan.
LANDING PARTY--A carrier licensed in a Landing Country which has agreed to
land the FLAG System and take responsibility for maintaining the terrestrial
portion of the FLAG System in such Landing Country.
LANDING STATION--The point at which the FLAG System connects to the domestic
telephone network in a Landing Country. Each Landing Station is constructed,
operated and owned by a Landing Party.
MAINTENANCE ZONE AGREEMENTS--Cooperative standby agreements among cable
operators in major ocean areas to share the expense of assuring constant
availability of cable ships capable of providing repairs to undersea cables. The
Company has entered into four zone agreements, which provide maintenance
services from the United Kingdom to Gibraltar in the Mediterranean; from
Gibraltar to Djibouti at the entry to the Red Sea; from India to a point south
of Okinawa; and the Pacific Ocean north of 25 DEG. latitude. In addition, the
Company has entered into a bilateral agreement for maintenance of the area from
the Red Sea to a point south of India.
MIU--Minimum Investment Unit. The Company's basic product is circuit
capacity for digital transmission, which is offered as separate capacity units
between any two Landing Countries comprising a total of 66 Segments (increasing
to 98 with the addition of the Jordan and Saudi Landing Stations) over which
capacity is offered. Capacity on each Segment is offered in MIUs. Each MIU
represents thirty 64 Kbps circuits.
NON-SWITCHED TRAFFIC--Traffic over owned and leased lines by resellers,
end-users and ISPs.
OPTICAL AMPLIFIER--A device to amplify an optical signal without converting
the signal from optical to electrical and back to optical energy.
POTENTIAL CARRIERS--New entrants to the international telecommunications
market which are not yet licensed international carriers but have substantial
economic incentive to become licensed. Includes fast-growing Segments of
non-switched traffic like ISPs.
PREFERRED SHARES--The 13% Series A Preferred Stock of the Company.
PSA--Provisional System Acceptance, being the date October 8, 1997 as of
which the FLAG System was completed in accordance with the Construction Contract
and could be put into full commercial operation.
REFINANCING--The collective reference to (a) repayment of the Old Credit
Facility, (b) the issuance on January 23, 1998 by the Company of its 8 1/4%
Senior Notes due 2008 and (c) the New Credit Facility.
SEGMENT--The portion of the FLAG System between any two Landing Countries.
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SHAREHOLDERS--The direct and indirect shareholders of FLAG.
SMW-2, SMW-3--Fiberoptic cables which link or will link Asia, the Middle
East and Europe. SMW-2 is operating at almost full capacity. SMW-3 is a cable
under construction expected to begin service in 1999.
SWITCH--A device that opens or closes circuits or selects the paths or
circuits to be used for transmission of information. Switching is a process of
interconnecting circuits to form a transmission path between users.
SWITCHED TRAFFIC--Voice, fax and data traffic.
SYNCHRONOUS DIGITAL HIERARCHY--A term used to refer to a family of
fiberoptic transmission rates created to provide the flexibility needed to
transport many digital signals with different capacities, and to provide a
standard for manufacturers to design from. In North America, the equivalent
technology is SONET (Synchronous Optical Network).
WDM--Wavelength Division Multiplexing. A way of increasing the capacity on
an optical fiber by simultaneously operating at more than one wavelength. With
WDM one can multiplex signals by transmitting them at different wavelengths
through the same fiber.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant certifies that it meets all of the requirements for filing
this Form 20-F and has duly caused this annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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FLAG LIMITED
(Registant)
By: /s/ JAMES P. CAMPBELL
-----------------------------------------
James P. Campbell
CHIEF FINANCIAL OFFICER
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Dated: April 13, 1999
