ACE*COMM Selected for Major U.S. Defense Contract for Telecommunications Management Systems; Multi-Year Programs Expected to Exceed $20 Million.

GAITHERSBURG, Md. -- ACE*COMM Corporation (NASDAQ:ACEC), today announced that it has been selected to provide its NetPlus(R) telecommunications management system (TMS) to a U.S. defense agency for a global deployment. These programs will encompass hundreds of installations, and are expected to total in excess of US $20 million for ACE*COMM over their lifespan. They include initial deployments scheduled over an 18 month timeframe, follow-on contracts for life cycle support and maintenance, further opportunities for ongoing upgrades and improvements, and additional sales opportunities for future versions of NetPlus(R) EOSS, which could include product assets recently acquired as part of 2helix.

"We have worked diligently to achieve this win for over a year and expect this new contract to have a positive impact on our operating results commencing in this current quarter and for some time to come," said George T. Jimenez, CEO of ACE*COMM. "This contract selection builds on the reputation and underscores the value of our NetPlus(R) technology. We are extremely pleased to have been selected to implement this defense agency's telecommunications management requirements, and we look forward to meeting and exceeding their requirements."

The federal government and military are more concerned than ever about the security, reliability, and efficiency of their communications networks. ACE*COMM designs large scale, secure, high-availability network management systems for federal government agencies and commercial enterprises, for operations in the U.S. and abroad. ACE*COMM's NetPlus(R) Enterprise Operational Support System (EOSS) enables federal government agencies and the military to take a commercial off-the-shelf (COTS) level approach to their communication systems needs, so they can realize greater value and improve their service delivery by efficiently managing internal and external flows of information.

Comments on Financial Results

"We expect our fourth quarter revenues to increase over previous quarters, in part because of this order. The amount of the increase will depend to some degree on the roll-out schedule under this contract," said Steve Delmar, CFO of ACE*COMM. "However, we do expect to have lower than anticipated revenues for the third quarter of fiscal 2005. A significant part of our revenue is realized under major procurements, and during this past quarter, we were affected by delays under existing contracts which deferred revenues at least one quarter. We also experienced delays of possible large contract awards that are now expected to be realized in the fiscal fourth quarter. We consequently expect our third quarter revenues to total less than $4 million. This revenue short-fall, combined with the one-time charges related to the recent acquisition of UK-based 2helix, will result in a significant impact on results for the quarter. On the other hand, with this new contract and other opportunities for contract awards in the fourth quarter, we are still optimistic about our overall position at the end of the fiscal year."

About ACE*COMM

ACE*COMM is a global provider of advanced operations support systems (OSS) solutions for telecom service providers and enterprises. ACE*COMM's solutions are applicable to a range of legacy through next-generation networks that include wired, wireless ,voice, data, multi-media, and Internet communications networks. These solutions include the analytical tools required to extract knowledge from operating networks - knowledge customers use for revenue assurance, to reduce costs, to accelerate time-to-market for new services, and to provide more effective customer care.

ACE*COMM recently acquired UK-based 2helix, to create a unique, high-value OSS solutions set that can deliver business intelligence and profitability for Tier 1 carriers, and expand its European presence.

For over 20 years, ACE*COMM technology has been effectively deployed for more than 300 customers, spanning over 4000 installations, in 70 countries world-wide. ACE*COMM-installed products are presently enabling the success of customers and partners such as AT&T, Cisco, IBM, Marconi, Motorola, Alcatel, General Dynamics, Northrop Grumman, Unisys, and Siemens. ACE*COMM is a registered ISO 9001 quality standard company. For more information, visit www.acecomm.com.

ACE*COMM, NetPlus, the ACE*COMM logo and N*VISION are registered trademarks, and Convergent Mediation is a trademark of ACE*COMM Corporation.

Except for historical information, the matters discussed in this news release include forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including, but not limited to: the failure of anticipated demand to materialise, delays or cancellations of orders due to various factors, including business and economic conditions in the U.S. and foreign countries; industry-wide slowdowns, any limitations on customers' financial resources, the continued convergence of voice and data networks, the continuing success of the Company's strategic alliances for product development and marketing, customer purchasing and budgetary patterns or lack thereof; pricing pressures and the impact of competitive products; the timely development and acceptance of new products; the Company's ability to adequately support its operations, and other risks detailed from time to time in the Company's Report on Form 10-Q and other reports filed with the Securities Exchange Commission.