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NextGenTel acquires broadband network in mid-Norway (Sør-Trøndelag)


Bergen, April 3rd, 2006 , Norwegian broadband company NextGenTel has agreed with Fosenkraft AS and Rissa Kraftlag BA (power utility companies) to acquire their jointly fully owned broadband company Fosen Link AS. The company Fosen Link AS is locally known as “Flink Bredbånd”, and has a substantial local market share. NextGenTel will by this acquisition take control of an ADSL-based broadband network comprising 22 Local Exchange Offices in the Fosen and Rissa area in Sør- Trøndelag, close to Trondheim.

Flink Bredbånd has around 2,575 broadband customers, now being taken over by NextGenTel effective from March 31st, 2006. The value of the agreement is 15.1 mNOK, of which 70 % will be paid in cash at closing, and the rest is being paid in cash at agreed milestones related to the integration of the network and the customer lines into the NextGenTel network.

The agreement includes approximately 75 customers not yet installed on the
ADSL platform.

The agreement will be closed during April 2006.

”NextGenTel strengthens its growth and secures the Company’s clear no. 2 position in the growing Norwegian broadband market by strategic acquisitions of local broadband players with their own network infrastructure and with a strong market position in their local markets. The acquisition of Fosen Link AS is the fourth acquisition made by NextGenTel so far, and confirms this strategy”, CEO of NextGenTel Olav Stokke says.

In conjunction with the agreement, NextGenTel, Fosenkraft and Rissa Kraftlag have established a long-term partnership within telecommunications and broadband. This includes among other items lease of network capacity and purchase of services related to network build-out and operation.

“FosenKraft AS and Rissa Kraftlag BA wanted a strategic partnership with NextGenTel AS in conjunction with the future broadband build-out and operation of the access network in the “Flink area”. This is now established as NextGenTel takes on the operational responsibility of the broadband customers, and the power utility companies can through this sale release funds for further infrastructure investments. The companies will also perform services for NextGenTel”, CEO Tore Nilsen, Fosen Kraft says. “We will through “Bredbåndsnett på Fosen” deliver communication services to NextGenTel. By this we will get an overall model that will benefit existing Flink customers, getting access to all NextGenTel products and services. The local community will also benefit from this by further improved and sustainable broadband capacity in the region.”

CEO Terje Tinglum in Rissa Kraftlag BA adds: “FosenKraft AS and Rissa Kraftlag BA are also looking forward to further future possible cooperation with NextGenTel within new telecommunication and broadband technologies. Especially within WiMax related wireless technology, where the power utility companies have resources, personnel and locations ready and in compliance with such installations, and where a relatively high potential can be released related to the leisure market (cabins, summer houses, etc.) where a majority of such potential users can be reached from existing locations. The WiMax technology can also be used to increase the reach into further local residential areas”.

The Fosen Link network will be seamlessly integrated within the NextGenTel network, and present Fosen Link customers will, within short, benefit from NextGenTel’s powerful and innovative network structure and capabilities.

To secure the further operations and customer handling locally, one of the employees in Fosen Link AS will carry on in his position, and will by this also strengthen the overall NextGenTel sales and marketing presence in Trøndelag.

NextGenTel will include 2,500 active lines from Flink Bredbånd in the monthly numbers for March 2006. The acquisition of 100 % of the shares in Fosen Link AS (Flink Bredbånd) will not have any effect on the NextGenTel Q1-2006 balance sheet, revenues or bottom- line results.


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