ALLEN, TX -- (MARKET WIRE) -- January 24, 2007 -- Xtera Communications, the leading supplier of all-Raman optical transport solutions, announced today that Faroese Telecom has selected Xtera to supply and deploy the transmission equipment for the SHEFA-2 submarine cable system, providing connectivity between the Faroe Islands, Shetland, Orkney and Scotland. The network will include the world's longest high-capacity unrepeatered segment by transmitting up to 190 Gbit/s per fiber pair over 389 km without the use of submerged repeaters or remote optically pumped amplifiers (ROPA).

Faroese Telecom, the incumbent telecom operator of the Faroe Islands, provides wireless, wireline and digital television services. Faroese Telecom is deploying the new unrepeatered cable network to support bandwidth-intensive applications for residential and commercial users. The cable will also be used along with existing submarine cables to insure highly reliable access to the rest of the world and international traffic.

The high-capacity, ultra-long unrepeatered SHEFA-2 network will be deployed using Xtera's all-Raman technology which has been used by a number of worldwide service providers over the past year to provide significant capacity upgrades on existing unrepeatered submarine systems. This deployment, on a new cable route, will showcase the strength of the all-Raman technology to simultaneously maximize both the reach and capacity of an unrepeatered network.

"Until very recently, repeaters would have been required to provide the planned capacity over this route, increasing both the initial and on-going operational costs of the system. Xtera's all-Raman technology significantly improves the economics of the project by eliminating the need for repeaters," said Kristian R. Davidsen, CEO, Faroese Telecom.

"Xtera's continued focus on all-Raman technology and product development, even during the downturn of the optical market, has resulted in the superior performance that is now benefiting network expansions all around the world," said Herve Fevrier, SVP Business Development, Xtera Communications.

Xtera's unrepeatered submarine product, Nu-Wave XLS, uses the latest technologies, including all-Raman amplification to achieve repeatered distances, in excess of 500 km, with an unrepeatered DWDM system. The system supports advanced IP and wavelength services (from GbE to STM-256/OC-768, including STM-16/OC-48, STM-64/OC-192 and 10GbE).

About Faroese Telecom

Faroese Telecom is the incumbent operator of the Faroe Islands. Faroese Telecom operates an extensive telecommunications network and offers a diverse range of fixed and mobile telecom services to both private and commercial customers. Faroese Telecom is part owner of the FARICE submarine cable that links Iceland, the Faroe Islands and Scotland. In addition, Faroese Telecom, via its wholly owned subsidiary, P/f Televarpið, deployed a digital terrestrial television system and now broadcasts a wide variety of TV channels to nearly all of the Faroe Islands. For more information, please visit www.ft.fo.

About Xtera Communications

Xtera Communications supplies innovative optical transport solutions enabling high-bandwidth service providers to offer profitable converged broadband services. Using patented all-Raman technologies, Xtera delivers the industry's only actual Wide Reach(TM) DWDM transport solution with the headroom to deliver abundant high-quality video, data and advanced voice services. Xtera's Wide Reach solution benefits regional, long haul, ultra-long haul and unrepeatered submarine applications. Recent news releases and further information are on Xtera Communications' Web site at: http://www.xtera.com/.

Company Contacts:
Xtera Communications
Daryl Chaires
Director of Marketing
+1 972 649 5187
dchaires@xtera.com