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                                                                   EXHIBIT 10.20

                            ESPRIT TELECOM UK LIMITED

                              EMPLOYMENT AGREEMENT



         THIS AGREEMENT is made as of the 1st July, 1998 by and between Esprit
Telecom Group Plc (the "Company"), and Dr. Hans-Peter Kohlhammer ("Employee")
(jointly, the "Parties").

         WHEREAS, the Company desires to employ Employee, and Employee desires
to become an employee of the Company, all on the terms and conditions set forth
herein; and

         NOW, THEREFORE, in consideration of the promises and the mutual
agreements made herein, the Company and Employee agree as follows:

1.       Employment.

         (a)      Position and Location. The Company shall employ Employee in an
                  Executive Management Team position, reporting to Chief
                  Executive Officer. Employee will be based at the Company's
                  office in Reading, U.K. travelling to other locations as
                  reasonably required in the performance of his/her duties.

         (b)      Commencement and Period of Employment. The employment contract
                  shall become effective as of 1st October, 1998 and shall be
                  continued until 30th September, 2001. If it is the intention
                  of the parties to conclude a further contract beyond 30th
                  September 2001, agreement should be reached no later than 31st
                  March, 2001.

         (c)      Hours of Work. Normal hours of work are 09.00 until 17.00 hrs
                  Monday to Friday, with a 30 minute meal break each day. No
                  payment will normally be made for any additional hours worked.

         (d)      Duties. Except as expressly authorized by the Company, during
                  the Employment Period Employee shall render his/her business
                  services solely in the performance of such duties as
                  Management shall assign to him, and shall be engaged
                  substantially full time with the Company. The Company may
                  direct Employee to perform services for, or on behalf of, the
                  Company or any affiliate of the Corporation (collectively, the
                  "Group"). Employee shall use his best efforts to promote the
                  interests and welfare of the Group.

         (e)      Shareholder Agreement. Employee shall at all times comply with
                  Company policies regarding share trading, particularly those
                  regarding insider trading.

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2.       Compensation, Fringe Benefits, and Holidays.

         (a)      Base Compensation. The Company shall pay Employee a base
                  salary at the rate of (pound)140,000 per year in monthly
                  installments paid into a bank account designated by the
                  Employee. Performance will be subject to a review annually
                  commencing 1st January 2000.

         (b)      Bonus. For the 1998/1999 fiscal year, Employee will be
                  eligible for an incentive bonus of 60% base salary based on
                  meeting all the following targets:

                  Revenue:                   o      212,000,000.00

                  Total Gross Profit:        o       61,500,000.00

                  EBIT:                      o        1,500,000.00

                  Minimum eligibility for the bonus payment is 85% of all
                  targets being met. There is no ceiling to the potential
                  payout. A graduated scale is utilized to determine the payout
                  level.

         (c)      Expenses and Travel. Employee will be required to work away
                  from the office from time to time, including working overseas
                  if necessary. The Company will reimburse reasonable expenses
                  incurred, provided that the arrangements are made by or with
                  the agreement of the Company. When working overseas, the
                  Company will take out any necessary insurance.

         (d)      Holidays. In addition to normal public holidays, Employee will
                  be entitled to twenty five (25) days' paid holiday in each
                  calendar year. This entitlement accrues pro rata throughout
                  each year and Employee's entitlement for 1998 will therefore
                  be 6 days. Employee's holidays are to be taken as agreed with
                  Management, after having given at least two weeks' prior
                  notice.

                  The holiday year commences on 1st January and ends on 31st
                  December.

                  Any holiday not taken at the end of each calendar year will
                  normally be forfeited and no payment in lieu of any unused
                  entitlement will be made. However, subject to approval by the
                  C.E.O. a maximum of 10 days may be carried over from year to
                  year.

         (e)      Medical Insurance. The Employee is entitled to free private
                  medical cover and, if married, cover is extended to the
                  Employee's immediate family.

         (f)      Life Assurance. The Employee is eligible to join the Company's
                  non-contributory Life Assurance scheme.

         (g)      Sick Pay. The Company operates a Sick Pay Scheme which
                  provides the following benefits:

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                  Up to 10 days paid absence in any 12 month period, thereafter
                  75% of salary for up to 6 months continuous absence. After 6
                  months continuous absence 75% of salary subject to acceptance
                  by the Company's insurers. Employee is required to notify the
                  Company immediately of any absence and to provide a Sickness
                  Certificate signed by a Doctor after an absence of 7 days
                  including non-working days.

         (h)      Health & Safety. Employee will be required to take reasonable
                  care with regard to health and safety and to cooperate with
                  the Company in complying with the requirements of the Health &
                  Safety at Work Act 1974.

         (i)      Company Car. Owing to the nature of the Employee's duties, the
                  company will provide a car allowance of (pound)550 per month.
                  In line with the Company's Car Policy this requires the
                  Employee to have a car for business use when required.

         (j)      Supplemental housing and Transportation Allowance. Employee
                  will be eligible to receive an allowance of (pound)500 per
                  month to cover air travel costs incurred from Germany to the
                  U.K. and accommodation costs when employee is required to
                  attend the Reading offices. The amount of this allowance will
                  be reviewed annually.

         (k)      Employee Stock Ownership Programme. The Corporation has
                  developed an employee stock ownership programme to allow
                  qualified employees of any Group company to earn and to
                  purchase ordinary shares of the Corporation on preferential
                  terms or conditions. Employee is entitled to participate in
                  such programme on terms in accordance with the Corporation's
                  regular practice for employees.

         (l)      Management Share Option Plan. Employee will be eligible to
                  participate in a special Management Share Option plan created
                  for key personnel integral to the building of the business
                  over the next three years, the details of which are as
                  follows:

                  140,000 ordinary shares (20,000 ADSs) are being set-aside in
                  your name with a maturity date of 26th February, 2001.

                  The exercise price for these ADSs is $17.75

                  The conditions that must be met before these options can be
                  executed are:

                  You must be an employee in good standing with Esprit Telecom
                  on 26th February, 2001 and the actual value of the ADSs must
                  have increased by at lest 50% to $26,625 per seven (7) shares
                  or one ADS.

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         (m)      Option Package. The Company undertakes that it will procure at
                  the first meeting of the Board of Directors after the date of
                  this Agreement that the following Options will be granted
                  subject to the Specified Conditions.

                  52,500 ordinary shares (7,500 ADSs) will be vested on 1st
                  October, 1998

                  52,500 ordinary shares (7,500 ADSs) will vest every six months
                  commencing 1st April, 1999 until 1st October, 2001.

                  The exercise price shall be US$17.75 per Option.

                  The Specified Conditions are: (1) each "Option" represents 7
                  ordinary shares of the Company (equal to 1 ADS); (2) unvested
                  Options shall lapse immediately upon early termination of this
                  Agreement by either the Employee or the Company; and (3)
                  Options may be exercisable up to 5 years from the vesting date
                  upon payment of the exercise price as directed by the Company.

3.       Trade Secrets. During the Employment Period, and after the termination
         of Employee's employment for any reason, Employee shall not use or
         disclose any of the Group's trade secrets or other confidential
         information. The term "trade secrets or other confidential information"
         includes, by way of example, matters of a technical nature, such as
         scientific, trade, and engineering secrets, "know-how," formulae,
         secret processes or machines, inventions, computer programs (including
         documentation of such programs), and research projects, and matters of
         a business nature, such as proprietary information about costs,
         profits, markets, sales, lists of customers and other information of a
         similar nature, to the extent not available to the public, and plans
         for future development. After termination of Employee's employment by
         the Company for any reason, Employee shall not use or disclose trade
         secrets or other confidential information, unless such information
         becomes a part of the public domain other than through a breach of this
         Agreement or is disclosed to Employee by a third party who is entitled
         to receive and disclose such information.

4.       Return of Documents and Property. Upon the termination of Employee's
         employment by the Company for any reason, or at any time upon the
         request of the Company, Employee (or his/her heirs or personal
         representatives) shall deliver to the Company (a) all documents and
         materials containing trade secrets or other confidential information
         relating to the Group's business and affairs, and (b) all documents,
         materials, and other property belonging to the Group, which in either
         case are in the possession or under the control of Employee.

5.       Discoveries and Works. All discoveries and works made or conceived by
         Employee during his/her employment by the Company, jointly or with
         others, that relate to the Group's activities shall be owned by the
         Group. The term "discoveries and works" includes, by way of example,
         inventions, computer programs (including documentation of such
         programs), technical improvements, processes, drawings, and works of
         authorship. Employee shall (a) promptly notify, make full disclosure
         to, and execute and

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         deliver any documents requested by, the Company to evidence or better
         assure title to such discoveries and works in the Group, (b) assist the
         Group in obtaining or maintaining for itself, at its own expense,
         patents, copyrights, trade secret protection, or other protection of
         any and all such discoveries and works, and (c) promptly execute,
         whether during his/her employment by the Company or thereafter, all
         applications or other endorsements necessary or appropriate to maintain
         patents and other rights for the Group and to protect the Group's title
         thereto. Any discoveries and works which, within six months after the
         termination of Employee's employment by the Company for any reason, are
         made, disclosed, reduced to a tangible or written form or description,
         or are reduced to practice by Employee and which pertain to the
         business carried on or products or services being sold or developed by
         the Group at the time of such termination shall, as between Employee
         and the Group, be presumed to have been made during Employee's
         employment by the Company.

6.       Termination.

         (b)      Without Cause. In the event the Company elects to terminate
                  this Agreement without cause, the Company shall pay to
                  Employee on the effective date of his/her termination the full
                  amount of any unpaid salary and commission/bonuses, payment
                  for the sale of Employee's interest in any shares of the
                  Corporation in accordance with the Corporation's Articles of
                  Association, payment for unused vacation accrued to that date
                  and any payments required by law. Such payment shall be made
                  less such deductions that are required by law and in full and
                  final settlement of all and any claims which Employee may have
                  against the Company or the Group arising out of or in
                  connection with his/her employment with the Company and its
                  termination. Such payment will not affect Employee's
                  continuing obligations under Section 3 and, if applicable,
                  Section 12. Nothing in this paragraph shall affect Employee's
                  statutory rights relating to dismissal.

         (c)      With Cause. In the event the Company terminates this Agreement
                  for cause, no payment shall be made under paragraph (b) above,
                  and Employee's unvested rights, if any, hereunder shall cease
                  as of the effective date of the termination. For the purposes
                  of this Agreement, the Company shall have cause to terminate
                  Employee's employment thereunder if Employee:

                  (i)      Is unable to perform his/her duties by reason of ill
                           health or injury for 120 days (whether consecutive or
                           not) in any period of 52 consecutive weeks;

                  (ii)     Becomes of unsound mind or is involuntarily committed
                           to an institution pursuant to any statute relating to
                           mental health;

                  (iii)    Is convicted of a criminal offence other than one
                           which in the opinion of Management does not affect
                           his/her position as an employee of the Company,
                           bearing in mind the nature of his duties and the
                           capacity in which he is employed; or

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                  (iv)     Is guilty of any serious default or misconduct in
                           connection with or affecting the business of the
                           Company or commits any serious breach of his/her
                           obligations under this Agreement.

         (a)      If the Company wishes to terminate Employee's employment or if
                  Employee wishes to leave its employment, the Company may
                  require Employee not to attend for work for a period of no
                  more than thirty (30) days from the date he/she is requested
                  not to attend for work.

7.       Disability. Employee agrees that if he/she is unable to perform his/her
         duties for the Group as a result of ill health or injury he/she will
         upon request submit him/herself to a medical examination at the
         Company's expense by a suitably qualified person of its choice. If that
         person is unable to confirm that Employee is fit to perform his/her
         duties or if there are factors which such person considers are relevant
         to the performance of those duties, Employee shall cooperate ensuring
         the prompt delivery of all reports to the Company.

8.       Assignment. Employee's rights and obligations under this Agreement
         shall not be assignable by Employee. The Company's rights and
         obligations under this Agreement shall not be assignable by the Company
         except as incident to the transfer, by merger or otherwise, of all or
         substantially all of the business of the Company. In the event of any
         such assignment by the Company, all rights of the Company hereunder
         shall inure to the benefit of the assignee.

9.       Notices. Any notice required or permitted under this Agreement shall be
         deemed to have been effectively made or given if in writing and
         personally delivered or mailed properly addressed in sealed envelope,
         postage prepaid by certified or registered mail. Unless otherwise
         changed by notice, notice shall be properly addressed to Employee if
         addressed to:

         Dr. Hans-Peter Kohlhammer
         Rosenweg 5
         95326 Kulmbach
         Germany

         and properly addressed to the Company if addressed to:

         Esprit Telecom Group plc
         Minerva House
         Valpy Street
         Reading
         Berkshire RG1  1AR
         Attention:  Chief Executive Officer

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10.      Amendment and Waiver. This Agreement may not be amended without the
         written agreement of the Parties. The waiver by any Party hereto of a
         breach of any provision of this Agreement shall not operate or be
         construed as a waiver of any other breach.

11.      Miscellaneous. This Agreement constitutes the entire agreement, and
         supercedes all prior agreements of the Parties hereto relating to the
         subject matter hereof, and there are no written or oral terms or
         representations made by either Party other than those contained herein.
         The validity, interpretation, performance and enforcement of this
         Agreement shall be governed by English Law, and the Parties hereto
         irrevocably submit to the non-exclusive jurisdiction of the English
         Courts. If any provision of this Agreement is held to be invalid or
         unenforceable by a court of competent jurisdiction, the Parties intend
         and agree that such invalidity or unenforceability shall not affect the
         remaining provisions. The headings contained herein are for reference
         purposes only and shall not in any way affect the meaning or
         interpretation of this Agreement.

12.      No Competition.

         (a)      Whilst Employee is employed by the Company and for a period of
                  twelve (12) months after the termination of his/her employment
                  with the Company, however it arises and irrespective of its
                  cause or manner, Employee shall not (except with the prior
                  written consent of Management) directly or indirectly and
                  whether on his/her own behalf or for another to do or attempt
                  to do any of the following:

                  (i)      solicit or accept the custom of a Customer for the
                           purpose of the supply of Relevant Goods or Services;

                  (ii)     give advice or provide services with a view to
                           asserting or enabling another person, company,
                           business entity or other organization to solicit the
                           custom of a Customer for the purpose of the supply of
                           Relevant Goods or Services;

                  (iii)    communicate with an employee in a manner calculated
                           or likely to cause that employee to leave or end or
                           seek to leave or end his or her position or
                           relationship with the Company or the Group for the
                           purpose of being involved in or concerned with either
                           the supply of Relevant Services or a business which
                           competes with or is similar to a Relevant Business,
                           regardless of whether or not such communication would
                           be in breach of any contract; or

                  (iv)     employ, engage the services of or work directly or
                           indirectly with an employee of the purpose of either
                           the supply of Relevant Goods or Services or a
                           business which competes with or is similar to the
                           Relevant Business; and

         (b)      Whilst Employee is employed by the Company and for a period of
                  three (3) month after the termination of his/her employment
                  with the Company, however it



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                  arises and irrespective of its cause or manner, Employee shall
                  not (except with the prior written consent of Management)
                  directly or indirectly and whether on his/her own behalf or on
                  another do or attempt to do any of the following:

                  (i)      undertake or carry on either alone or in partnership
                           or be employed engaged or interested in any capacity
                           whatsoever in any business directly competitive with
                           the Relevant Business in any territory where the
                           Company is at the time of such cessation carrying on
                           or actively seeking to carry on the Relevant
                           business;

                  (ii)     invite, procure, negotiate or accept the supply of
                           Relevant Goods or Services from a Supplier;

                  (iii)    stop or inhibit a Supplier from supplying, or affect
                           the terms on which a Supplier will supply Relevant
                           Goods or Services to the Company or the Group for the
                           purpose of the Relevant Business;

(c)      For the purpose of this Section:

                  (i)      "Customer" means a person, company, business entity
                           or other organization who was at any time during the
                           Relevant Period a customer or client of the Company
                           or the Group (whether or not Relevant Goods or
                           Services were actually provided during such period)
                           or with whom the Company or the Group was negotiating
                           to supply goods or services for the purpose of the
                           Relevant Business at the time of expiry of the
                           Relevant Period;

                  (ii)     "Supplier means a person, company, business entity or
                           other organization who was at any time during the
                           Relevant Period:

                           (A)      supplied goods or services specifically
                                    designed and/or manufactured for the Company
                                    or the Group for the purpose of the Relevant
                                    Business; or

                           (B)      had agreed or was negotiating to make such
                                    supplies at the time of expiry of the
                                    Relevant Period;

                  (iii)    "Relevant Goods or Services" means goods or services
                           identical or similar to or competitive with those
                           which;

                           (A)      the Company or the Group was supplying or
                                    actively and directly seeking to supply to a
                                    Customer as described in Section 7(b)(i) for
                                    the purpose of the Relevant Business; or

                           (B)      the Supplier was supplying or had agreed to
                                    supply or was actively and directly
                                    negotiating to supply as described in
                                    Section 7(b)(ii)

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                                    and which were being supplied by that
                                    Supplier to the Company or the Group for the
                                    purpose of the Relevant Business;

                  (iv)     "Relevant Business" means the business being carried
                           on or actively sought to be carried on by the Company
                           or the Group at the date of termination of Employee's
                           employment in which, pursuant to his/her duties,
                           Employee has had direct personal involvement at any
                           time during the Relevant Period;

                  (v)      "employee" means a person who is employed by or who
                           renders personal or other services to the Company or
                           the Group in the Relevant Business and who was so
                           employed or so rendered services at any time during
                           the Relevant Period; and


                  (vi)     "Relevant Period" means the period of one year ending
                           on the day Employee ceases to be employed by the
                           Company.

         (d)      The subclause or part of such subclause of this Section
                  constitutes an entirely separate and independent restriction.
                  If any restriction is held to be invalid or unenforceable by a
                  court of competent jurisdiction, it is intended and understood
                  by the Company and Employee that such invalidity or
                  unenforceability will not affect the remaining restrictions.

The parties have executed this Agreement on the day and year first above
written.

                                            ESPRIT TELECOM UK LIMITED



                                            /s/ David L. Oertle
                                            ---------------------------------
                                            DAVID L. OERTLE
                                            Chief Executive Officer

                                            1st July, 1998

EMPLOYEE SIGNATURE



/s/ Hans-Peter Kohlhammer
-------------------------------
Dr. Hans-Peter Kohlhammer

Date:    1 July 1998
     --------------------------


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