Approximately 8.4 Million Shares of GTC Telecom Stock Locked Up Until The Year 2000.

COSTA MESA, Calif.--(BUSINESS WIRE)--August 25, 1999--

Continuing its efforts to maintain shareholder value, GTC Telecom (OTCBB:GTCC) announced today that it has agreed to a lockup agreement with its major shareholders.

Paul Sandhu President & CEO of GTC Telecom stated "We have agreed to this lock-up for our shareholders to illustrate our commitment to the Company and the investing public. Having just recently launched our ISP service and Five Cent Long Distance plan, we are obviously excited about our growth potential. The timing of our shares becoming available was coincidental, so we wanted to put our shareholders at ease that we were not intending to make any sudden changes. We believe in GTC Telecom's fundamental business and are in this for the long haul."

Company founders Paul Sandhu and Eric Clemons which own approximately 6,715,088 and 1,719,522 shares respectively, would have the right to register for sale beginning on September 19, 1999 approximately 640,000 shares between now and the year 2000. Paul Sandhu and Eric Clemons, founders of GTC Telecom, have agreed to register a maximum of 25,000 shares each between now and the year 2000.

Eric Clemons, Chief Operating Officer of GTC Telecom commented, "Our current public float is approximately 1.9 million shares. To register 640,000 shares would be increasing the float approximately 32%, and would dilute shareholder value. This clearly was not our intention. We have put our heart and soul into GTC to create what we believe is a next generation Telco/Internet company. GTC has done everything to be on the cutting edge of business development and we believe that this move places us on the cutting edge of shareholder relations. We want to show our shareholders that we believe in the Company and appreciate their ongoing support."

This agreement follows GTC Telecom's announcement of its new, aggressive five cent per minute any time, any day rate plan which fiercely competes with rate plans from AT&T (NYSE:T), MCI/Worldcom (NASDAQ:WCOM), Sprint (NYSE:FON) and Qwest Communications (NASDAQ:QWST). Unlike other low long distance rate plans, GTC's new plan has no restrictions and no monthly fees.

About GTC Telecom

Founded in 1997, GTC Telecom is a Telecom/Internet company, providing long distance service to small and medium sized businesses as well as residential customers throughout the United States. GTC Telecom offers basic Internet and long distance bundled and non-bundled plans. For basic unlimited 56K dial up Internet access, GTC offers a plan for $9.95 per month. GTC Telecom has some of the lowest long distance rates in the industry today. GTC's long distance service offerings include outbound service, inbound toll-free 800 service, and dedicated private line services for data. In addition, GTC offers an array of other Internet services, including wireless T1 access, web hosting at www.gtcinternet.com, and a portal site, www.gtczone.com. The Company also offers long distance calling cards via the Internet on its site, www.ecallingcards.com. For further information visit GTC's web site at www.gtctelecom.com.

Included in this release are "forward-looking statements" that the Company believes falls within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations reflected in such forward-looking statements will prove to have been correct. The Company's actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors including sales levels, distribution and competition trends and other market factors.