23 May 2006

ASI Buys Stake in Modesat Communications

TALLINN, May 23, 2006 – The Ambient Sound Investments group has invested 500,000 euros to buy a third of Modesat Communications, an Estonian developer of radio communications technology. When commercialized, Modesat’s research will help improve the energy efficiency of communications devices while increasing their effective bandwidth and coverage area.

"We're thrilled to participate in a project that will benefit numerous technology platforms, from satellite modems to Wifi and Wimax," said ASI CEO Toivo Annus. "Modesat develops technology that is clearly targeted at the global market and, even before the product-development phase, device manufacturers are paying attention."

Modesat's technology boosts several wireless applications, among them satellite communication, Wifi, Wimax and emergency radio applications used by paramedics, law enforcement and security firms. With these applications, signal stability is paramount to connection speed. Modesat's technology helps boost the signal coverage area and reduce sensitivity to noise interference -- without increased energy consumption.

"As is the case with data cables, wireless technologies, too, have bandwidth limitations," said Modesat CEO Tarmo Pihl. "With expensive satellite links, for example, squeezing more data into an existing channel will lead to considerable savings. This is an area where Modesat's R&D work and intellectual property has solid international market potential."

While Modesat's operations are based in Estonia, its patented core technology was developed by Belarusian researchers who are also among the company's shareholders. With product development accelerated by the announced investment by ASI, Modesat expects to line up its first major international customers in 2008.

Modesat Communications
Modesat Communications is an R&D company that is working on technology that improves the throughput of communication channels while reducing the devices' energy requirements. Besides ASI, Modesat shareholders include its CEO Tarmo Pihl and three foreign nationals. In the coming months, the company plans to hire 10 employees.

Ambient Sound Investments
ASI is an investment group founded in 2003 by four Estonia-based founding engineers of Skype, the internet communication company. In March 2006, the group invested 1.6 million euros in Clifton, an Estonian start-up which plans to mass-produce heat-resistant low-cost semiconductor switches for the electronics industry. In April, ASI acquired a majority stake in Oskando, an Estonian telematics solutions provider. Modesat Communication is the group's third technology investment.

For more information, please contact:

Tarmo Pihl
CEO and Chairman
Modesat Communications

Toivo Annus
CEO and Chairman
Ambient Sound Investments