Zapp secures $94 million loan

Zapp, Romania's youngest mobile telecommunications operator, has recently signed a $94 million financing package consisting of a $40 million project loan arranged by Bank Austria Creditanstalt/HVB Romania and Raiffeisen Bank Romania as Mandated Lead Arrangers, and $54 million subordinated loans from the US Ex-Im Bank (funding via Citibank) and the Black Sea Trade Development Bank.

Zapp will mainly use the funds to accelerate its network development, increasing the coverage area and improving the services it provides.

"The financing will allow Zapp to sustain its growth, both in terms of network deployment and subscribers. Our objective is to achieve a coverage similar to the level offered by GSM operators within 6 months," said Piermario Di Pietro, Zapp CFO.

The money will also be used to prepay the loans Zapp obtained to purchase equipment from suppliers such as Lucent Technologies.

The transaction is important for two main reasons. First, Zapp is now fully funded, which means that the operator will be able to finance its growth without requiring additional external sources of financing. Second, this is the first time when a CDMA450 operator obtains significant financing by banking institutions.

"We have so far counted on funds from our shareholders or the equipment suppliers. From now on, thanks to this financing and to our operating performance, we can independently achieve our long term objectives", Mr. Di Pietro added.

The loan was granted, among other criteria, due to the company's excellent performance, ever since the first mobile communications service based on CDMA450 technology was launched. The company posted a spectacular turnover evolution, year on year: from $14 million in 2002, to $52 million in 2003 and to $93 million in 2004. 2004 has also been a turning point for Zapp because early in the year the company achieved its operational break-even. "This result in less than two years from commercial launch is an industry record for a late entrant in the market and demonstrates the power of our technology and of our strategy", Mr. Di Pietro said.

Moreover, the banks have appreciated the great potential of this business, strongly supported by investments in state-of-the-art technology, made by Zapp ever since launch. A recent example is the launch of the first broadband mobile communications service across the country, allowing the users to access the Internet at speeds of up to 2.4 Mbps, based on the CDMA2000 1xEV-DO technology. The new service, available in Bucharest and all the county capitals, is enjoying tremendous success among customers, as sales have clearly exceeded all initial forecasts.

About Zapp
Zapp is the first telecommunications company in the world using a digital wireless network based on CDMA2000 technology in the 450 MHz band. CDMA2000 enables Zapp to provide more cost-effective and best-quality voice services, along with mobile Internet and high-speed data services. Zapp mainly addresses clients who need premium communications solutions. Zapp's parent company is Inquam, Europe's leading privately-owned provider of professional mobile radio solutions for businesses. The shareholders of Inquam include QUALCOMM, world leader on the market of CDMA-based mobile digital products and services, and the investment fund Omnia Holdings LTD, located in the Middle East. For more information on Zapp, visit

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