GTC Buys Telspan

GTC Telecom agrees to acquire TelSpan, which owns the rights to acquire the fourth largest fiber optic network in Mexico

April 26, 2004

2 Min Read

COSTA MESA, Calif. -- GTC Telecom Corp. (OTCBB:GTCC - News) today announced that it has entered into an Agreement to acquire TelSpan, Inc. in a tax-free stock swap transaction. TelSpan, a California corporation, owns the rights to acquire out of bankruptcy, at a substantial discount, the fourth largest fiber optic network in Mexico, consisting of approximately 4,000km of fiber optic lines and other related assets. The network, which is currently active, encompasses the "Golden Triangle" of Monterrey, Guadalajara and Mexico City as well as other key areas of Mexico, and will allow GTC to provide cost-effective telecom and information services to key metropolitan centers in the rapidly expanding U.S./Mexico telecommunications corridor. TelSpan is currently in the process of finalizing its financing for the acquisition of the network. The closing of GTC's acquisition of TelSpan is conditioned on the successful financing and completion of its acquisition of the network and related assets.

In a related agreement, GTC agreed to sell a controlling interest of its Perfexa Solutions, Inc. Business Process Outsourcing ("BPO") call center and IT development subsidiary to the shareholders of Infospan, Inc., a California company commonly controlled by some of the shareholders of TelSpan. Infospan, a BPO, call center and IT development company headquartered in Irvine, CA, has call center operations in Mexico, significant sales networks for customer growth opportunities for India, Mexico and the U.S. and a seasoned management team with significant experience in the outsourcing sector.

S. Paul Sandhu, GTC's CEO stated, "The acquisition of TelSpan will allow us to leverage GTC's established U.S. telecommunications operations with TelSpan's access to the 4th largest fiber network in Mexico. This, coupled with our ongoing strategy to expand into the local services market, will allow us to create a full service, facilities-based, telecommunications company able to better compete in today's rapidly changing marketplace."

Mr. Sandhu continued, "The combination of Perfexa and Infospan allows Perfexa to tap Infospan's experienced sales force, extensive contract opportunities and resources. Perfexa will then be able to provide call center and IT development services not only from India but also from Mexico and the United States."

Farooq Bajwa, TelSpan's CEO stated, "We are very excited with the synergy created by combining TelSpan's Mexico facilities with GTC's established U.S. telecommunications operations. The coupling of GTC's U.S. operations and TelSpan's Mexican network will allow the combined companies to aggressively exploit the largest international telecom corridor between any two countries in the world."

Mr. Bajwa continued, "Infospan's extensive sales network and potential business opportunities, together with Perfexa's established operations will allow the combined companies to become a significant player in the world-wide Business Process Outsourcing market."

GTC Telecom Corp.

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