buy local and long distance telephone company Frontier Corp. by another $1 billion yesterday after a decline in its stock price eroded much of the premium it previously offered to pay.

Global Crossing said it now will pay about $9 billion, or 2.05 shares of its stock for each Frontier share in exchange for a commitment from Frontier to spurn other potential suitors.

Under the terms of the previous agreement, Global Crossing would have paid about $8 billion or 1.8229 shares of its stock for each Frontier share.

Global Crossing, which is building undersea and international fiber optic communications networks, said the amendments were designed to increase the certainty of the deal's closing and show management's commitment to the strategic merits of the deal.

Global Crossing will gain a foothold in the United States through Frontier's US fibre optic network and its local telephone operations.

The combined company's network will connect more than 160 of the largest business centres worldwide.

As part of the new offer, Global Crossing also said it would also buy back up to $500 million of its stock following the completion of the Frontier deal.

Shares of Global Crossing fell 1-1/2 to 22-1/2 in morning trading on Nasdaq.

Shares of Frontier fell 1/4 to 42 on the New York Stock Exchange.

Shareholders of Global Crossing will meet on Sept. 22 and shareholders of Frontier on Sept. 23 to vote on the terms of the revised agreement, which is subject to shareholder approval.

Shareholders holding more than 51 percent of the voting power in Global Crossing already have agreed to vote in favour of the merger.

Shareholders representing more than two-thirds of the equity of Global Crossing, and Frontier's top two executives agreed not to sell any of their shares of Global Crossing within six months of the close, which is expected by the end of September.

The deal is expected to be immediately accretive to Global Crossing's operating cash flow.

The new offer marks the second time Global Crossing raised its offer for Frontier. Global Crossing originally offered to buy Frontier in March but raised the offer in May when Global Crossing also offered to buy local phone company U S West Inc.

Qwest Communications International Inc. later launched unsolicited bids for both Frontier and U S West.

It eventually won the hand of U S West and left Frontier to Global Crossing.