Cellular Technical Services Announces Entry Into Prepaid Phone Card Market.

Business/High Tech Editors

SEATTLE--(BUSINESS WIRE)--Jan. 14, 2000

Cellular Technical Services Company, Inc. (Nasdaq:CTSC) ("CTS") today announced the formation of Isis Tele-Communications, Inc. ("Isis"), a majority-owned subsidiary.

Isis' primary business is designing, marketing and distributing domestic and international prepaid long-distance wireline phone cards. It also intends to pursue opportunities in the wireless prepaid phone card market.

"As part of CTS' overall strategy to provide a wide range of products and services for the telecommunications industry we, together with three highly experienced phone card industry executives, have created Isis to focus on the expanding prepaid phone card market. Industry analysts estimate that this market is approximately $2 billion and growing at double-digit rates." Stephen Katz, CTS Chairman and CEO, stated. "We have previously stated that one of our goals was to identify new business opportunities to grow the company's revenue and profits. We believe the prepaid phone card market is one such opportunity, and that Isis will begin to contribute revenue almost immediately."

Brian Linn, President of Isis, added, "We believe the domestic prepaid phone card market holds attractive opportunity for growth as the acceptance of prepaid phone cards is accelerating in the United States. Further, we view this an opportune time to enter this growth market as it is still fragmented, and we see the opportunity for industry consolidation."

CTS provides real-time information processing and management solutions for the telecommunications industry. Over the past 11 years, CTS has used its extensive experience with real-time wireless call processing to create technologically advanced solutions for this industry, including integrated solutions for fraud management. Today, CTS is building a more diversified, vertically structured organization with a focus on providing a wide range of products and services.

Special Note Regarding Forward-Looking Statements: This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include but are not limited to: CTS' dependence on analog cellular networks for certain products and services; its vulnerability to rapid industry change and technological obsolescence; its limited customer base and reliance on a relatively small number of customers and customer contracts; its dependence on a limited number of existing products and services; uncertainty of continued demand for and market penetration of its existing products and services under existing and future contracts; uncertainty in its ability to timely develop, introduce and gain acceptance of new products and services; uncertainty of the demand for and market penetration of new products and services; the possible impact of competitive products and pricing; the risk that its current and future products may contain errors or be affected by technical problems that would be difficult and costly to detect and correct; manufacturing difficulties, including reliance on a limited number of outside vendors for key components and processes; potential difficulties in managing changing business conditions; dependence on key personnel; the availability of financing; and other risks described in CTS' filings with the Securities and Exchange Commission.