Cellular Technical Services Reports Third Quarter And Nine-Month Results.

SEATTLE--(BUSINESS WIRE)--Nov. 7, 1997--Cellular Technical Services Company, Inc. (Nasdaq NM Symbol: CTSC) ("CTS"), a leading provider of real-time information management systems for the wireless communications industry, today reported financial results for its third quarter and nine-month period ended September 30, 1997. Total revenue for the quarter decreased to $2.4 million, compared with $10.5 million in the prior year period. Net loss for the period was ($4.8) million, or ($0.21) per share, compared with net income of $54,000, or $0.00 per share, in the third quarter of 1996. As had been previously announced by the company, the third quarter loss was due to continued delays in gaining new orders and additional acceptances of the company's Blackbird Platform(R) system during the period.

Revenues for the nine-month period ended September 30, 1997 increased 86 percent to $26.5 million compared with $14.0 million in the prior year period. Net loss for the first nine months of 1997 was ($1.3) million or ($0.06) per share, compared with a net loss of ($4.4) million or ($0.20) per share, in the same period last year.

The company stated that, based on positive results of recent field tests, it has completed commercial rollout of its new software upgrade to all of its customers. As a result, in the fourth quarter the company has begun to receive a substantial number of the delayed system acceptances and has started shipping a small number of new systems to existing customers.

Stephen Katz, CTS Chairman and CEO, said: "Throughout the third quarter we worked very closely with our customers to install a significant software upgrade for the Blackbird Platform system. The new upgrade performed very well in its recent field tests in major markets. As a result, we've begun receiving system acceptances on a substantial number of existing cell-site systems and we've started to ship new Blackbird Platform systems." Katz said the company is working with existing and potential new domestic customers to gain system orders and continues to make progress with potential international customers. "We have system trials in progress in several countries outside of the U.S. and we anticipate shipping units to an international customer either by year-end or early in 1998. We continue to believe that there are growth opportunities for the Blackbird Platform both domestically and internationally," he said.

CTS provides technologically advanced solutions for the wireless industry to rapidly and cost-effectively grow their businesses. The company's Blackbird(R) Platform fraud prevention product line is shutting down millions of fraudulent calls each week in more than 40 of the largest markets across the United States, including: Los Angeles, New York, San Francisco, Chicago, Detroit, Boston, Atlanta, Milwaukee, Philadelphia, Baltimore, Washington D.C., and San Diego.

-0- Special Note Regarding Forward-Looking Statements: A number of statements contained in this press release are 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: the Company's dependence on the analog cellular communications market worldwide; its vulnerability to rapid industry change and technological obsolescence; the Company's limited customer base and reliance on a relatively small number of customers; the possible impact of competitive products and pricing; uncertainties in duration of the life cycle of its products; the risks 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; risks involved in the early stages of the life cycle of its products, including gaining worldwide commercial market acceptance; manufacturing difficulties, including reliance on a limited number of outside vendors for key components and processes; potential difficulties in managing growth; dependence on key personnel; the uncertain level of actual purchases of its products by current and prospective domestic and international customers under existing and future agreements; and other risks described in the Company's filings with the Securities and Exchange Commission. -0- Blackbird is a registered trademark of Cellular Technical Services Company, Inc -0-

         CELLULAR TECHNICAL SERVICES COMPANY, INC.
                 CONDENSED BALANCE SHEETS
                        (in 000's)
                        (unaudited)
                                            Sept. 30,    Dec. 31,
                                               1997        1996
                                            ----------  ----------
                                ASSETS

CURRENT ASSETS
  Cash and cash equivalents                 $   3,736   $   4,854
  Accounts receivable, net                      6,157      11,616
  Inventories, net                              5,972       8,275
  Prepaid expenses and other current assets       559         831
                                            ----------  ----------

   Total Current Assets                        16,424      25,576

PROPERTY AND EQUIPMENT, net                     3,961       3,177

SOFTWARE DEVELOPMENT COSTS, net                 3,545       3,599
                                            ----------  ----------

TOTAL ASSETS                                $  23,930   $  32,352
                                            ==========  ==========

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities  $   1,665   $   6,365
  Payroll related liabilities                     825         735
  Taxes (other than payroll and income)           564         660
  Customers' deposits                              38       4,626
  Deferred revenue                              3,236       1,781
                                            ----------  ----------

   Total Current Liabilities                    6,328      14,167

STOCKHOLDERS' EQUITY                           17,602      18,185
                                            ----------  ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $  23,930   $  32,352
-0-                                         ==========  ==========



         CELLULAR TECHNICAL SERVICES COMPANY, INC.
            CONDENSED STATEMENTS OF OPERATIONS
           (in 000's, except per share amounts)
                        (unaudited)

                       Three Months Ended   Nine Months Ended,
                         September 30,         September 30,
                       -------------------  --------------------
                         1997      1996       1997       1996
                       --------- ---------  ---------  ---------

REVENUES
  Systems              $    993  $ 10,256   $ 23,432   $ 13,246
  Services                1,386       193      3,040        749
                       --------- ---------  ---------  ---------

Total Revenues            2,379    10,449     26,472     13,995
                       --------- ---------  ---------  ---------

COSTS AND EXPENSES        7,203    10,442     27,970     18,647
                       --------- ---------  ---------  ---------

INCOME (LOSS) FROM
OPERATIONS               (4,824)        7     (1,498)    (4,652)

INTEREST INCOME              75        47        167        215
                       --------- ---------  ---------  ---------

INCOME (LOSS) BEFORE     (4,749)       54     (1,331)    (4,437)
INCOME TAXES

PROVISION FOR INCOME          0         0          0          0
TAXES
                       ---------  ---------  --------- ---------

NET INCOME (LOSS)      $ (4,749) $     54   $ (1,331)  $ (4,437)
                       =========  =========  ========= =========

NET INCOME (LOSS) PER  $   (.21) $    .00   $   (.06)  $   (.20)
SHARE
                       =========  =========  ========= =========

WEIGHTED AVERAGE
SHARES OUTSTANDING       22,780    23,589     22,705     21,857

CONTACT: Cellular Technical Services Co. Inc.

Joseph D. Pititto

Director, Investor Relations

[phone]