Cellular Technical Services Reports 1996 Second Quarter and Six-Month Results.

SEATTLE--(BUSINESS WIRE)--Aug. 6, 1996--Cellular Technical Services Company, Inc. (NASDAQ/NMS: CTSC) ("CTS"), a provider of real-time information management systems for the wireless communications industry, today announced financial results for the three month and six month periods ending June 30, 1996.

Revenues for the 1996 second quarter were $2.9 million compared with $3.8 million in the prior year period. The net loss for the period was ($2.0) million, or ($0.09) per share, compared with a net profit of $0.5 million, or $0.02 per share in the second quarter of last year. Approximately ($0.04) million, or ($0.02) per share, of the second quarter 1996 loss can be attributed to expenses incurred in relation to the company's proposed public offering of common stock which was withdrawn in July 1996.

Revenues for the six-month period ending June 30, 1996, were $3.7 million compared with $7.2 million in the same period a year ago. The net loss for the period was ($4.5) million, or ($0.21) per share compared with a net profit of $0.7 million, or $0.03 per share for the first six months of last year. (Both second quarter and six-month per share results reflect the two-for-one stock split that became effective in June 1996.)

Bob Dahut, CTS president, said, "The second quarter and first half results are in line with previously announced expectations and can be attributed primarily to a combination of the long sales cycles that characterize our industry, the uneven nature of contract revenue from the company's existing products, and continued investments in sales, marketing, customer support and research and development efforts associated with our Blackbird Platform and PreTect fraud prevention products."

Dahut noted that, "Second quarter revenues, while up on a sequential basis from the first quarter, still primarily reflect only contributions from our Hotwatch products and the significant progress that we have begun to make in signing agreements and deploying Blackbird/PreTect in major markets across the country. To date, we have shipped more than 250 units in seven different markets and, based on existing and pending agreements, we expect to deploy in several additional markets and to ship in excess of 1,000 units by year-end 1996.

"Most important, the system is already operating in several markets and its effectiveness in combating cloning fraud is generating strong customer satisfaction. Based on anticipated formal customer acceptance, we expect to begin realizing significant revenues from Blackbird/PreTect reaching approximately $20 million during the second half of 1996. Furthermore, based on existing agreements and ongoing negotiations with carriers in both the domestic as well as international markets, we expect revenues from the Blackbird system to grow substantially in both 1997 and 1998."

CTS develops, markets and supports real-time information management systems for the wireless communications industry. The company's integrated data management platforms and software applications enable wireless communications service providers to more rapidly and cost effectively grow their businesses.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward looking statements. The statements above which are not historical facts (such as when the words "anticipate," "estimate," "expect" and similar expressions are used) are forward looking statements that involve risks and uncertainties, including, but not limited to, demand for the company's products and market acceptance risks, the effect of economic conditions, the impact of competitive products and pricing, hardware and software product development, commercialization and technological difficulties, manufacturing capacity and product supply constraints or difficulties, actual purchases by current and prospective customers under existing and expected agreements, the progress of contract implementation efforts that allow the company to recognize revenue under its accounting policies, and the results of financing efforts, along with other risks detailed in company's Forms 10K and 10Q Securities and Exchange Commission filings. -0-

          CELLULAR TECHNICAL SERVICES COMPANY, INC.
                    STATEMENTS OF OPERATIONS
                         (unaudited)

                       Three Months Ended        Six Months Ended
                            June 30,                 June 30,
                        1996        1995         1996        1995
REVENUES
License and service
 fees               $2,388,032   $3,467,040   $3,033,654   $6,203,808
Equipment sales        422,787      199,148      511,951      811,960
Interest income         60,558      106,558      168,051      225,542

Total Revenues       2,871,377    3,772,746    3,713,656    7,241,310

COSTS AND EXPENSES
Cost of license and
 service fees          858,252      857,335    1,643,452    1,779,874
Cost of equipment
 sales                 860,702      230,740    1,139,107      842,471
Sales and marketing    674,639      580,157    1,497,512    1,087,764
General and
 administrative      1,159,617      560,004    1,670,228    1,161,787
Research and
 development         1,308,605    1,042,000    2,254,354    1,618,777

Total Costs and
 Expenses            4,861,815    3,270,236    8,204,653    6,490,673

INCOME (LOSS) BEFORE
 INCOME TAXES       (1,990,438)     502,510   (4,490,997)     750,637

PROVISION FOR INCOME
 TAXES                               10,000                    15,000
NET INCOME (LOSS)  $(1,990,438)  $  492,510  $(4,490,997)  $  735,637

NET INCOME (LOSS)
 PER SHARE              $ (.09)      $ .024       $ (.21)      $ .037

WEIGHTED AVERAGE
 SHARES OUTSTANDING 21,898,426   22,687,380   21,753,664   22,423,034

              CELLULAR TECHNICAL SERVICES COMPANY, INC.
                      CONDENSED BALANCE SHEETS
                            (unaudited)

                                         June 30,    December 31,
                                           1996         1995
                ASSETS

CURRENT ASSETS
Cash and cash equivalents              $ 5,011,905   $ 9,448,255
Accounts receivable, net                   769,713       508,238
Inventories, net                         4,527,519     1,947,060
Prepaid expenses and other current
assets                                     779,381       827,712
 Total Current Assets                   11,088,518    12,731,265

PROPERTY AND EQUIPMENT, net              2,236,849     2,292,632
SOFTWARE DEVELOPMENT COSTS, net          3,517,945     3,346,748
TOTAL ASSETS                           $16,843,312   $18,370,645

       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued
 liabilities                           $ 1,950,247   $ 1,154,396
Payroll related liabilities                569,468       223,222
Taxes (other than payroll and income)      174,280       197,843
Deferred revenue and customers' deposits   885,750        61,973

Total Current Liabilities                3,579,745     1,637,434

STOCKHOLDERS' EQUITY                    13,263,567    16,733,211

TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                $16,843,312   $18,370,645

CONTACT: Cellular Technical Services Company, Inc. Seattle

Joseph D. Pititto, 516/887-0727

or

Lippert/Heilshorn & Assoc.

Keith Lippert, 212/838-3777

Kris Otridge, 415/955-2735