Axesstel Announces Payment in Full of Secured Convertible Notes; Financial Condition Strengthened by Secondary Equity Offering and Elimination of Debt.

SAN DIEGO -- Axesstel, Inc. (AMEX:AFT), a designer, developer and marketer of high-quality, CDMA-based fixed wireless voice and data products for the worldwide telecommunications market, announced today that it has paid in full all outstanding balances due under the secured convertible term notes issued to Laurus Master Fund, Ltd. in March 2004 and August 2004 in the aggregate face amount of $4 million.

"We're pleased that we have paid off the balance of our secured indebtedness through the partial use of proceeds from our recent secondary equity offering," said Mr. Mike H.P. Kwon, the CEO and Chairman of Axesstel. "The redemption of the Laurus notes and the removal of the general security interest in our assets will give Axesstel increased flexibility to pursue other short term and long term financing arrangements from time to time."

On March 31, 2005, Laurus converted $2.37 million of principal due under the March 2004 note into 750,000 shares of Axesstel's common stock, and Axesstel redeemed all remaining balances due under such note and all outstanding balances due under the August 2004 note for an aggregate cash payment of approximately $1.5 million. The redeemed amount represents 115% of the principal due under the March 2004 note and 120% of the principal due under the August 2004 note plus accrued interest through March 30, 2005.

As a result of the redemptions, the company recorded a charge of approximately $800,000 in the first quarter for the prepayment penalties noted above and to expense the remaining balance of note payable discounts, finders fees and loan fees paid in connection with the note financings.

Axesstel designs, develops and markets fixed wireless voice and data products for the worldwide telecommunications market. Axesstel's products are based on Code Division Multiple Access (CDMA) technology, and include CDMA2000 and emerging third-generation, or 3G, broadband data technologies, which are newer versions of the CDMA standard. Axesstel's product lines include fixed wireless desktop phone terminals, payphone terminals, voice/data terminals and broadband modems used for high-speed data services. Axesstel is headquartered in San Diego, California, with a research and development center in Seoul, South Korea. More information on Axesstel can be accessed through its website at www.axesstel.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above include forward-looking statements relating to Axesstel's financial strength and improved ability to raise capital in light of the redemption of the secured notes. Axesstel wishes to caution readers that actual results could differ materially from those suggested by the forward-looking statements due to risks and uncertainties and a number of important factors. Those factors include, but are not limited to, the possibility that capital may not be available to Axesstel on commercially reasonable terms, or at all, Axesstel's history of net operating losses and fluctuating operating results, and other risk factors and information contained in Axesstel's filings with the Securities and Exchange Commission.