"We are very excited to be working together in a joint venture with complementary participation. We will be the most outstanding and technologically advanced provider of backhaul circuits in Japan connecting the undersea fiber optic cable landing stations with access to the major city centers." said Mr. Howard A. Neckowitz, President and CEO of Pacific Gateway, and Dr. Y. Niiro, President of KDD-SCS. "Pacific Gateway has an extensive bandwidth sales team, and KDD-SCS is the global system integrator providing the most advanced fiber transmission technology. Together, we will be the most outstanding provider of backhaul circuits in Japan."

The JV will provide its customers with state-of-the-art technology and economically reasonable connectivity to city centers from the cable landing points in Japan, thus meeting the exploding demand for the backhaul circuits in Japan to be used for global Internet and data services. The JV will advance the scope of customers' interconnection between their respective worldwide undersea fiber optic cables and points of presence in Japan.

About Pacific Gateway: (Nasdaq: PGEX)
Pacific Gateway, through its wholly owned subsidiary PGExpress, will provide Internet and high bandwidth services to the global market. It is expanding its network and global points of presence to provide connectivity, co-location, managed data and other advanced Internet applications to the exploding global Internet services market. In addition, the Company is a diversified facilities-based international telecommunications carrier serving a wide array of domestic and international telecommunications service providers and retail customers. The Company and its offshore subsidiaries are a party to 44 operating agreements providing landing rights in 28 countries and have ownership interests in 19 digital undersea fiber optic cable systems providing for the exchange of telecommunications traffic with foreign carriers. The Company recently announced its commitment to invest over 150 million dollars in the Japan-US and TAT-14 Cable Networks, positioning the Company as a low cost provider of services for the future. In addition, Pacific Gateway has a US network spanning twelve of the major metropolitan cities in the US. Pacific Gateway presently operates switching and international gateway facilities in New York, Los Angeles, Dallas, the United Kingdom, Russia, New Zealand, Japan, Australia, and Germany and is developing additional offshore markets. Additional Pacific Gateway information is available at "http://www.pgexch.com".

About KDD Submarine Cable Systems Inc. :
KDD Submarine Cable Systems Inc. (KDD-SCS) is the most prominent supplier on the globe of the submarine cable network systems, and leads the world by developing, making design, and manufacturing the most advanced undersea cables. Since its foundation in May 1992 with small numbers of employees to co-construct TPC-5CN with AT&T-SSI, many supply contracts have been awarded to KDD-SCS up to now. Among them are APCN, FLAG, JIH, SMW-3, China-US, PC-1, Japan-US and TAT-14. As a result, the total length of optical fiber submarine cable systems which have been (is) constructed until today by KDD-SCS amounts to approximately 245,000km, with the annual sales of 1B. dollars. KDD-SCS is expanding its scope of business by committing itself to the upgrade of TPC-5CN, APCN and FLAG, to the non-repeater submarine cables, and to the system maintenance service as in the case of JIH. Furthermore, KDD-SCS will expand its business to the terrestrial network installation/operation. This PGE/KDD-SCS JV case is one of such terrestrial network business. Additional KDD-SCS information is available at "http://www.kddscs.co.jp/".