Cellular Technical Services Announces Receipt of Settlement Funds.

Business Editors

SEATTLE--(BUSINESS WIRE)--June 7, 2000

Cellular Technical Services Company, Inc. (Nasdaq:CTSC) ("CTS"), a leading provider of products and services for the telecommunications industry, today announced the settlement of a legal action it recently commenced against a vendor through its prepaid phone card subsidiary. Under the terms of the settlement, CTS has received and will recognize in the second quarter a one-time net cash payment of approximately $1.2 million, or $0.53 per basic share.

Stephen Katz, CTS Chairman and CEO stated, "We are pleased with the outcome of this matter. Despite the loss of this vendor, we have with our partners replaced that vendor's services and expect sequential quarterly revenue growth from our prepaid phone card business for the remainder of this year, in alignment with our expectations."

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 for CTS or its affiliates to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include but are not limited to: dependence on analog cellular networks for certain products and services; vulnerability to rapid industry change and technological obsolescence; limited customer base and reliance on a relatively small number of customers and customer contracts; 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.