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"This is a huge vote of confidence in ETel, and is very significant in today's contracting capital markets especially since Lucent have curtailed their vendor financing programme around the world," said Sean Melly, chief executive officer of ETel.
ETel will use the funding to rollout ISP and voice and data switching equipment and, in particular, to develop Metropolitan Area Networks in Prague, Budapest, Warsaw and Bratislava.
It is understood ETel is looking at buying the central European operations of Nasdaq quoted GTS for in excess of IEP100 million.
Such an acquisition would accelerate ETel's business in central Europe by two to three years, as GTS has already laid around 600 km of fibre optic cable in the region as well as employing 600 people there.
Melly said ETel is looking at completing one or two acquisitions by the end of the year and said he saw huge potential for growth in central European markets.
He said that ETel had decided to go with Lucent's switching technology for its networks around a year ago.
The deal will run over five years and allows ETel to use up to EUR20 million of Lucent's technology which Melly said "is almost like having cash in the bank."
"Central European economies are among the fastest growing in Europe and a lot of multinational companies, who are an integral part of our business are moving in there," Melly said.
In November of last year ETel Group raised EUR55 million in venture capital financing with four investors: Dresdner Kleinwort Benson Private Equity, Argus Capital Partners, Greenhill Capital Partners and Intel Capital.
ETel acquired telecommunications company Globix in December.
Globix had recently acquired a full public telecommunications operators license by the Czech Telecommunications Authority to build and operate public telephone networks in the Czech Republic from the beginning of this year.
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