HANNOVER, Germany -- LambdaNet Communications, a leading European supplier of telecommunications and Internet services, today announced that its Suspension of Payments status in Spain has been lifted. The move follows the successful restructuring of its Spanish network and business operations.

"We are very pleased to announce that after just five months we have been able to remove the Suspension of Payments status put in place while the Spanish network and business operation were restructured. During this period our primary objective was to ensure that it was ‘business as usual’ for our existing customer base and we are confident that this was achieved - both in terms of network management and customer service,” explained Jaime Martorell, Managing Director, LambdaNet Spain. “The result is a leaner, more competitive structure that will allow LambdaNet to aggressively increase its market share in both the Spanish and Portuguese markets.”

LambdaNet applied for protection in February 2003, following a major drop in demand for backbone and Internet services in Spain. The most significant impact was the decision by its largest Spanish customer, Iberbanda to restructure its own network – leased in totality from LambdaNet Spain.

Now that Iberbanda no longer requires this breadth of access, LambdaNet has made the decision to revert back to the original core network footprint, continuing to provide connectivity between the major cities and business districts of Spain and Portugal with connections to LambdaNet’s international IP and optical network.

Working with LNG Holdings S.A. and RENFE, the two principle creditors of LambdaNet Spain, Managing Director, Jaime Martorell has restructured the Spanish business operation to ensure that it remains a viable business and reliable network and services provider.

“Much of the core network beyond the original 16 cities was built specifically to meet the customer needs of Iberbanda. The restructuring of LambdaNet Spain therefore makes perfect commercial sense. There is absolutely no point in owning and managing a network that costs more to maintain than can be recouped in revenues,” explained Bernie Smedley, CEO of LNG Holdings S.A.

“There have been very few companies in the telecoms sector that have been able to revert from a status of payment protection. We are confident that we made the right decision by filing for protection and in doing so are certain that we will continue to provide a high quality network service to carriers and service providers in Spain. I am very pleased with the outstanding work and professionalism of Jaime Martorell and his commitment to getting this company on the back on track. We must also thank our administrators, investors, suppliers and customers for working with us during this period and ensuring that there were no service interruptions for our customers in Spain.”

LambdaNet Communications GmbH