1996-015                                                      July 25, 1996

KDD America Inc. (main office: New York, president: Hideo Yamamoto), a wholly-owned subsidiary of KDD, has acquired approximately 9.5% interest in Pacific Gateway Exchange Inc. (main office: Burlingame, California; president: Howard Neckowitz), a U.S. telecommunications carrier, for approximately 2.2 billion yen on July 24.

Pacific Gateway Exchange Inc. (PGE) is a U.S. international facilities-based carrier established in 1991. PGE provides international telephone, international leased circuit, and domestic long-distance telephone services. KDD and PGE have a business agreement to jointly provide international telephone and leased circuit services between Japan and the United States.

Since its founding, PGE has experienced a high rate of growth based on a low cost competitive strategy. To help fund continued growth, the company completed its initial public offering on July 19 and its stock now traded on NASDAQ. KDD America's capital support for PGE is taking place parallel to the initial public offering.

KDD plans to continue developing international telecommunications services between Japan and the United States through these arrangements with PGE as well as other U.S. telecommunications carriers and continue to explore opportunities for joint businesses and marketing activities, including the introduction of new services in this area.

[Reference]

Profile of PGE