IMPSAT Announces Full Year 2006 Results

Business Wire, April 9, 2007

BUENOS AIRES, Argentina -- IMPSAT Fiber Networks, Inc. ("Impsat" or the "Company") (OTC BB:IMFN), a leading provider of integrated broadband data, Internet and voice telecommunications services in Latin America, announced its full year results for 2006. All figures are expressed in U.S. dollars.

FULL YEAR 2006 HIGHLIGHTS

* Net Revenues posted the twelfth consecutive increase in the fourth quarter. Net Revenues for full year 2006 totaled $285.0 million, an increase of $31.0 million, or 12.2% compared to 2005.

* EBITDA amounted to $61.1 million, or 21.5% of net revenues for the year. EBITDA increased $9.0 million or 17.3% as compared to 2005. Excluding a one time charge of $3.8 million related to a Management Incentive Plan, EBITDA would have totaled $64.9 million and EBITDA growth would have been $12.8 million, or 24.6%.

* Capital Expenditures for 2006 totaled $35.6 million.

* Impsat Brazil increased revenues and EBITDA by $19.2 million, or 39.9%, and $8.1 million, or 88.6%, respectively.

FULL YEAR 2006 RESULTS

Commenting on the results for the year, Impsat CEO, Ricardo Verdaguer stated: "2006 was a year of great accomplishment for Impsat. We not only increased revenues for the third consecutive year but we continued improving revenue mix towards value added services with better margins. The announcement, in October, of Global Crossing's proposed acquisition of Impsat will bring us a whole new set of opportunities to leverage the future growth of the company."

Revenues

Net revenues during 2006 totaled $285.0 million, an increase of $31.0 million, or 12.2%, compared to 2005. All product lines increased revenues period-over-period.

* Broadband and Satellite revenues increased $11.8 million, or 6.8%, period-over-period, driven by higher sales of IP Services, primarily in Brazil, Peru, Venezuela and USA.

* Internet revenues increased 17.9% period-over-period as we increased services to corporate customers, particularly in Brazil, Colombia and Venezuela.

* Value Added Services revenues increased by 43.7% as compared to 2005. Growth was led by higher sales of hosting and managed services, mainly in Brazil, Chile and Colombia.

* Telephony revenues grew by 9.3% compared to 2005, led by higher sales to corporate customers in Peru and Brazil.

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The Company's growth in revenues over the prior year is a combination of several factors including: (a) the increased customer base; (b) cross-selling to existing and new customers; (c) bundling of existing and new services; (d) stable or improved macroeconomic conditions throughout the Latin American region; and (e) appreciation of local currencies, mainly Brazil.

Operating Expenses

Operating Expenses for 2006 totaled $284.1 million, an increase of $27.0 million, or 10.5%, compared to 2005. This increase is principally related to an $8.7 million increase in direct costs, a $10.2 million increase in salaries and wages, a $3.1 million increase in selling, general and administrative expenses, and a $5.0 million increase in depreciation and amortization charges.

Direct Costs for 2006 totaled $137.6 million, an increase of $8.7 million (or 6.7%) compared to 2005. The principal components of direct costs were as follows:

Contracted Services increased $1.6 million compared to 2005. Contracted services include installation and maintenance services. The increase is related to the expansion of Impsatos proprietary network and customer base.

Other Direct Costs principally include provisions for doubtful accounts, licenses and other fees, sales commissions paid to salaried work force and to third-party sales representatives, and node expenses. Other Direct Costs for 2006 increased by $6.7 million compared to 2005. The increase is related primarily to higher services delivered, an increase in energy costs, the appreciation of local currency in Brazil, and higher doubtful accounts charges - compared to a net recovery in 2005.

Leased Capacity Costs increased by $0.7 million during 2006 as compared to 2005. The increase is a consequence of higher terrestrial and international capacity costs related to greater broadband and Internet services as well as higher interconnection costs related to the growth in telephony services.

Depreciation and Amortization. Our depreciation and amortization expenses for the year ended December 31, 2006 totaled $60.3 million, an increase of $5.0 million compared to depreciation and amortization for 2005. The increase in depreciation and amortization expenses is principally due to an increase in the Company's depreciable fixed assets and the depreciation of goods in the Company's warehouse.

Salaries and Wages for 2006 totaled $60.8 million, $10.2 million higher than 2005. The increase is due to higher headcount and variable compensation, currency revaluation in Brazil, salary increases related to adjustments for inflation; and a one-time charge of $3.8 million recorded under the Company's management incentive plan related to Global Crossing's proposed acquisition of Impsat. Consolidated number of employees increased from 1,208 at December 31, 2005 to 1,251 at December 31, 2006. This increase in headcount was required to sustain revenue growth in Brazil.