EXHIBIT 11.1

                             Code of Business Ethics

Code of Business Conduct

Overview

COLT is committed to the highest possible legal and ethical standards. It is not
the policy of COLT  merely to comply with the letter of the law.  Rather,  it is
the policy of COLT to instil and to maintain a true culture of  compliance  with
all laws, rules and regulations wherever we do business.

In conducting  COLT's business,  each employee and person acting for COLT has an
unqualified  responsibility  to observe and to comply with all applicable  laws,
rules and  regulations.  We must ensure  that our  conduct  always sets the best
possible  example.  Conduct  that  may  permit  even  a  mistaken  inference  of
wrongdoing must be avoided.

The  Corporate   Compliance   Committee  is  responsible   for  supervising  and
administering  this Code and consists of senior  managers  within the  Corporate
Secretariat,  Group  Finance,  Human  Resources  and  Internal  Audit  and  Risk
functions.   When  necessary,   the  Corporate   Compliance  Committee  acts  in
consultation with other members of senior management.  The Corporate  Compliance
Committee reports to the Audit Committee of the Board of Directors.

Members of the Corporate  Compliance  Committee  can be contacted by e-mail,  by
telephone  or in  writing;  details  are  given  at the  end of this  Code.  All
employees  and people  acting for COLT are  encouraged  to contact the Corporate
Compliance Committee when they believe it necessary to do so.

Conflicts of Interest

COLT expects all  employees to display a high degree of business  loyalty to the
Company  and in turn COLT is loyal  to,  and  supportive  of its  employees.  No
employee may engage in business  activities  that cause,  or may  reasonably  be
thought to cause,  a conflict with the  interests of the Company.  A conflict of
interest may arise when an employee is influenced by  considerations  of gain or
benefit for his or herself or a family  member.  If a conflict  of interest  may
arise or appear to exist, it should be avoided.  Conflicts of interest take many
forms.  They  cannot  all be  specifically  addressed  by this Code of  Business
Conduct.  The  following  are  examples of  conflicts  of interest  that must be
avoided:
     o    Engaging in any activity that competes with COLT.
     o    Personally  receiving cash,  special  discounts or gifts from any COLT
          customer  or  supplier,  which  might lead the giver to think they are
          going to benefit in some form.
     o    Serving  as an  employee,  consultant,  officer  or  director  of  any
          customer,  supplier or  competitor  of COLT without the prior  written
          approval of the Corporate Compliance Committee.
     o    Acquiring  or  maintaining  any  financial  interest in any  customer,
          supplier or competitor of COLT.  Owning publicly traded  securities is
          acceptable, however, provided that such ownership does not provide you
          with management influence or control.
     o    Supervising,  reviewing or influencing the job evaluation, hiring, pay
          or benefit of any family  members at COLT or any  supplier or customer
          of  COLT.   However  this  is  not   intended  to  prevent   employees
          recommending family members for employment at COLT.

Insider Trading

COLT  encourages its employees to be shareholders in the Company but no employee
or connected  person may deal in COLT shares or other  security (or any security
of any  other  listed  company)  while  in  possession  of  material  non-public
information or during a close period.

An  individual  is  connected  to an  employee by reason of  marriage,  birth or
interest in another entity or trust,  and by acting as an investment  manager on
behalf of the employee or a connected person. A deal in shares includes any sale
or purchase of shares and any exercise of an option over shares.  Information is
material if it would be important to an investor in determining whether to trade
in the  security  or would  be  likely  to have an


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impact on the price of the  security.  A close  period is  normally  the  period
between the end of each quarter's  financial period up to and including the time
of the announcement of the results for that quarter.

Purchases or sales based on material  non-public  information  by another person
for the benefit of or at the request of a COLT employee is also prohibited.

Insider  dealing  is a  criminal  offence  in many  countries  and is  unethical
everywhere. It is illegal under UK and U.S. securities laws to disclose material
non-public information to another person who seeks to profit from it. It is also
illegal to advise  others  about  buying or selling  securities  on the basis of
material, non-public information.

It is  perfectly  acceptable  for you to deal in shares of COLT,  as long as you
assure yourself that any information you have is public and that the deal is not
prohibited for any other reason.  Certain individuals are deemed at all times to
be in possession of unpublished  information,  which may affect the share price.
These individuals are prohibited from dealing without clearance from the Company
and will know who they are.

Fair Competition

COLT believes in vigorous yet fair  competition  and supports the development of
appropriate   competition  laws.  Many  countries  prohibit  collaboration  with
competitors,  or competitors'  representatives  and other activities that reduce
competition.  These  actions can result in criminal  penalties for you and COLT.
The  following  are some examples of  prohibited  conduct:
     o    Discussing  with a competitor  the setting of any terms of sale (e.g.,
          discounts,  prices,  credit  terms,  etc.),  the setting of production
          levels, dividing customers or territories or boycotting any customer.
     o    Discussing or attempting to influence customers regarding their resale
          prices.

Confidentiality

You may have access to  confidential  information due to your  employment.  Such
information  must not be shared with others  outside  COLT or used for  personal
gain.   Confidential   information  includes  customer   information,   supplier
information,  knowledge  of business  plans or  projections,  sales or marketing
programmes,  customer lists, significant legal or regulatory action or strategy,
new products or price changes,  changes in senior  management,  divestitures  or
mergers and acquisitions.

Appropriate Use of Electronic and Other Company Resources

All  electronic  resources of the company are assets  belonging to COLT. You are
expected to use these resources in a responsible manner.  Although incidental or
occasional  personal  use of such  assets  is  permitted  so long as it does not
interfere  with the conduct of COLT  business,  misapplication  or waste of such
assets is prohibited and may amount to a criminal act.

You should protect your own password, if you have one, and not use anyone else's
ID to access records. Do not alter records or software unless you are authorised
to do so and always  ensure that any  software  you use has been  obtained  from
authorised Company suppliers.  Only install software if you are authorised to do
so. In most countries the above will supplement  other guidelines for the use of
electronic and other company resources.

Data Protection

EU directives and local laws provide for the  protection,  transfer,  access and
storage of personal  information  on  customers,  employees,  contacts and other
individuals.  To achieve compliance with these provisions you should familiarise
yourself  with  their  key  requirements,  be aware of the  need to  create  and
maintain  appropriate  systems and comply with COLT  policies and  procedures on
data  protection.  Details of relevant  policies and procedures  which relate to
your  function  are  available  from  the  Group  Data  Protection   Officer  at
data.protection@colt-telecom.com.

Government, Media and Investor Relations

COLT  strives to build long term  sustainable  relationships  with  national and
local Government agencies, the media and investors and has processes in place to
manage these relationships.

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If you are  contacted  by a  representative  of a government  agency  seeking an
interview or making a request for documents or information you should respond by
immediately referring all such contacts to the senior legal advisor of the local
operation.

Unless you have been specifically authorised to speak to the media or investors,
you must refer all media and  investor  inquiries  to the  Director of Corporate
Communications or your Managing Director.

Prohibition of Kickbacks, Bribes and Payoffs

All  kickbacks,  bribes  and  payoffs,  whether in cash or any other  form,  are
prohibited.  Kickbacks,  bribes and payoffs may not be promised, nor may they be
received by you or by any member of your family.

Prohibited payments do not become permissible when made indirectly. You may not,
for example,  authorise  or allow a third party to make a prohibited  payment on
behalf of COLT.  Neither may you allow all or part of a legitimate payment to be
diverted.

It does  not  matter  that a  prohibited  payment  may be  demanded  by a public
official. The prohibited payment still may not be made.

Failure to report a  prohibited  payment is itself a  violation  of this Code of
Business Conduct and may result in disciplinary  procedures  being  implemented.
This is so even if the person with  knowledge of a prohibited  payment played no
role in making the prohibited payment.

All of us at COLT  have an  affirmative  obligation  to ensure  that  prohibited
payments are not made.

Accurate Books and Records

The integrity of COLT depends on the honesty,  completeness  and accuracy of its
records.  All accounting  records,  employee  records,  employee expense claims,
application  forms and other  corporate  books and records must  accurately  and
fairly  reflect  all  underlying  transactions.  It  is  every  COLT  employee's
responsibility to make sure that correct authority for each transaction has been
obtained and that  receipts,  disbursements,  journal  entries etc are accurate.
These  documents  must contain  wording that  clearly  describes  the reason and
purpose for each transaction and must be kept somewhere safe. You are prohibited
from  making any false or  fictitious  entry in any of the books and  records of
COLT or its affiliates or subsidiaries.

No payment on behalf of any corporate  entity shall be approved or made with the
express or implied  agreement  or intent that any part of such  payment is to be
used for any purpose other than that  described by the documents  supporting the
payment.  Accordingly,  any  agreement  for the  employment  of a  sales  agent,
business  consultant  or promoter or for the payment of a finder's  fee shall be
based  upon  documentation  that  accurately  reflects  the true  nature  of the
arrangement.  Policies with respect to retaining  agents and other third parties
are discussed in more detail below.

Examples  of  transactions  that  would  violate  the Code of  Business  Conduct
regarding books and records include the following:
     o    Payments   that  are  falsified  or  not  recorded  in  the  Company's
          accounting records.
     o    Claiming  reimbursement  of  expenses  which are not  incurred  in the
          furtherance  of COLT's  business  or are  outside of the  policies  or
          procedures on the payment of such expenses.
     o    Payments that are made through backdated or altered invoices.
     o    Any   transaction  in  which  invoices  do  not  set  forth  the  true
          transaction purchase or sale price.
     o    The  creation or  maintenance  for COLT of any bank  account in a name
          other than the name of the Company.

Undisclosed Funds

COLT will not create or maintain  any secret or  unrecorded  fund or asset.  Any
employee  having  knowledge  of any secret or  unrecorded  fund or asset  should
immediately report the matter to the Corporate Compliance Committee.

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Employees

COLT is committed to attracting and retaining the best people based upon ability
and  merit  and  maximising  every  opportunity  for  employees  to share in its
success.  Through its internal  information  systems and consultation  processes
COLT  will  maintain  good  communications  with all  employees.  COLT  seeks to
engender a culture of openness and honesty,  with individuals  expected to treat
each other properly and with respect and consideration at all times.

COLT will not tolerate harassment or bullying of any form. Sexual harassment and
harassment based on someone's race,  religious beliefs or sexual  orientation is
unacceptable.  Apart from being  unlawful in most of the countries in which COLT
operates,   such  harassment  is  disruptive  and  contrary  to  COLT's  values.
Discrimination on the grounds of race,  gender,  sexual  orientation,  religious
beliefs or disability is not  acceptable.  Violations of this policy will result
in disciplinary  action including  termination of employment where  appropriate.
Incidents of harassment or discrimination should be reported to your local Human
Resources Manager.

Creating a Safe Working Environment

You are  obliged  to carry out your  work in a safe  manner,  not to cause  harm
either to  yourself  or to  others,  and to  report  any  potentially  unsafe or
unhealthy situations to the appropriate authority immediately.  You must observe
all safety and environmental regulations. These vary from country to country, so
always  find out what the rules are,  follow  them,  and try to observe the best
practice possible.

People Acting on Behalf of COLT

From time to time, some employees may have reason to retain third parties to act
on behalf of COLT. Such third parties include agents, sales  representatives and
consultants.  Any employee  involved  with the  retention of a third party has a
responsibility  to satisfy himself or herself that  appropriate  safeguards have
been  established  to ensure  that the third party will comply with this Code of
Business  Conduct,  and all relevant laws. All contracts with third parties must
be  reviewed  and  approved  in  advance  by the  senior  legal  advisor  of the
applicable local operation.

Gifts and Hospitality

It is not our policy to prevent  employees  giving or receiving  gifts of modest
value  or  preventing  you  receiving  or  giving  reasonable   business-related
hospitality  (e.g.  dining or attending  sports or social events) subject to the
following guidelines.

Any and all  gifts or  hospitality  you may wish to offer or  receive  involving
government  officials  regardless  of value must be  approved  in advance by the
Corporate Compliance Committee.

With  respect to  non-government  officials,  you may receive or offer gifts and
hospitality  in connection  with COLT business in accordance  with the following
policies:

Gifts

You must not  accept  any form of gift,  service  or  hospitality,  directly  or
indirectly which might lead the giver to think they are going to benefit in some
form. You may not give or receive gifts or gratuities  with a value of more than
L100 (or  equivalent) per calendar year to or from any individual or company (or
collectively   individuals  within  the  same  company)  who  is  a  current  or
prospective vendor, customer,  supplier or business partner of COLT. If you wish
to give or  receive a gift of more than  this,  you must  complete  and submit a
Gifts  Notification Form to the COLT Corporate  Compliance  Committee (copies of
such forms are available on the Intranet).

You must return any gift(s) if the value of that gift (or total  gifts)  exceeds
L100  (or  equivalent).  It is  recognised  that in some  instances  and in some
cultures it would be considered  bad manners to return a gift and to do so could
be  detrimental  to COLT's  reputation.  If you could not  return  it,  you must
surrender  the gift to the  COLT  Corporate  Compliance  Committee,  which  will
determine how the matter will be dealt with.

Regardless of value,  you may not engage in any of the  following  activities in
connection  with your status as an employee of COLT:
     o    Giving or receiving  cash, cash equivalent  gifts,  cheques,  or other
          negotiable funds.
     o    Soliciting any gift, favour or other form of preferential treatment.

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     o    Borrowing or lending  money (other than from any entity that is in the
          business of lending, on normal terms generally available.)

Hospitality

You may give or accept tickets to sporting,  cultural,  social or  entertainment
events, subject to the following conditions:
     o    Pre-approval must be obtained from the Corporate  Compliance Committee
          if the  total  value of the  hospitality  to be  offered  or  accepted
          exceeds L100 (or equivalent).
     o    You may  occasionally  give or accept  tickets where the person giving
          attends  the event  with the  recipient  and the  primary  purpose  of
          attending is to discuss business or build a business relationship.
     o    If you give or accept tickets where the one giving does not attend the
          event with the  recipient,  then the  transaction is considered a gift
          and is subject to the overall annual limit of L100 (or equivalent) per
          calendar year.
     o    Resale of tickets is expressly forbidden.

If you  have  any  questions  as to the  value  or  permissibility  of a gift or
hospitality, you should seek guidance from the Corporate Compliance Committee.

In deciding whether to give or receive a gift,  consider  whether  disclosure of
the full  details of your  acceptance  of the gift  would  damage in any way the
Company's integrity or reputation.

Political Payments

No COLT business  unit,  entity or employee  shall pay any COLT funds or furnish
any COLT  facilities  or services to any  political  party,  or to any political
office holder or candidate, or to any initiative or referendum campaign,  except
with the prior written approval of the Board of Directors.

Reporting Prohibited Conduct

You may not act in any manner that will violate any Company policy,  and you may
not ask any  other  employee  or  person  acting  on  behalf of COLT to commit a
violation.  In addition,  if you have information or knowledge of any conduct or
transaction  prohibited  by this Code of  Business  Conduct,  you must  promptly
report such matter to your manager and/or to the Corporate Compliance Committee.
A failure to report a known  violation is itself a violation and may subject you
to disciplinary action.

No person reporting a suspected violation will be subject to retaliation because
of a good faith report. All reports will be maintained in complete confidence to
the extent possible.

Discipline

Violations of the policies  described in this Code of Business Conduct or of any
other applicable policy of COLT, may result in disciplinary action. Depending on
the  circumstances,   including  the  nature  and  severity  of  the  violation,
disciplinary action may include termination of employment.

Enforcement and Compliance

All  employees  are required to confirm that they have read and will work within
this Code of Business Conduct.

The  Code  of  Business  Conduct  is  subject  to and  does  not  replace  local
legislation or regulation.

Local compliance officers will be responsible for:
     o    Compliance  with this Code of Business  Conduct within his or her area
          of responsibility.
     o    The distribution of relevant  information to ensure employee knowledge
          is sufficient to ensure compliance with this Code of Business Conduct.
     o    Any questions or interpretation of this Code of Business Conduct.
     o    Ensuring that  suspected  violations of this Code of Business  Conduct
          are referred to the Corporate Compliance Committee.

Any doubt about the interpretation of this Code of Business Conduct is to be
referred to the Corporate Compliance Committee.

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Contacting the Corporate Compliance Committee
The Corporate Compliance Committee can be contacted:
     o    By e-mailing compliance.committee@colt-telecom.com
     o    By telephoning 8-441-5444 (+44/0 20 7863 5444)
     o    By writing to The Corporate  Compliance  Committee,  c/o The Corporate
          Secretary,  COLT  Telecom  Group plc,  Beaufort  House,  15 St Botolph
          Street, London EC3A 7QN.

This Code of Business Conduct document is owned by the Corporate Secretary.















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