Mpower to Acquire ICG Communications

Mpower Holding Corporation, the parent company of Mpower Communications Corp. (www.mpowercom.com), a leading provider of broadband Internet access and telephone services to business customers, today announced a definitive agreement to acquire Denver-based ICG Communications, Inc.'s customer base and certain network assets in California.

"In ICG, we have found a strategic transaction that transforms our business," stated Mpower Chairman and Chief Executive Officer Rolla P. Huff. "The addition of ICG's statewide SONET-based fiber network to our deep collocation and switching infrastructure affords us new products such as private line, accelerates our speed-to-market with IP Centrex capabilities, positions us as a strong player in the wholesale market, and reduces our reliance on the ILECs."

Under the terms of the agreement, Mpower will acquire ICG's California retail and wholesale customers.

Mpower expects to fully integrate the ICG assets throughout 2005. The acquisition is expected to contribute in excess of $30 million in revenue and $8-$10 million of operating income (excluding expenses related to depreciation and amortization of the acquired assets) in 2006.

"We have long said that we believe CLEC consolidation is necessary and that Mpower would be a leader in that effort in the West," Huff added. "As a result of our disciplined approach, this acquisition puts Mpower in a leadership position in the California competitive telecommunications market, provides strong operating income and cash flow growth, presents additional value creation opportunities and preserves our strong cash position."

Mpower assumes management control of the retail and wholesale California customer base and network assets immediately. Subject to regulatory approval, Mpower expects to close the acquisition before the end of this year.

Columbia Capital and M/C Venture Partners maintain significant holdings in the communications services sector and seek to invest in business models poised for long-term growth.

"As an active investor in the telecommunications sector, we have looked at many different CLECs and a variety of business plans. We believe Mpower has the underlying network, business plan, tenured and savvy management team and financial strength to be the premier consolidation platform in the West," commented John Siegel, a Partner at Columbia Capital.

Mpower will host a conference call to discuss the details of its third quarter 2004 financial and operating results in addition to the ICG California acquisition.