Cybertel's Wholesale Unit Nearly Doubles Sales Revenues in May -- More Than Doubles Sales Goals.

LA JOLLA, Calif.--(BUSINESS WIRE)--Aug. 5, 1999--

Cybertel Communications Corporation (OTC BB:CYTP) announced today that its wholesale division is growing at a record pace. The monthly sales revenues for Cybertel's wholesale division almost doubled in May, increasing 90% over April's sales volumes. In May, Cybertel sold approximately $400k worth of long-distance through the exchanges it works with.

The rapid growth is a result of several things. Cybertel has recently signed an agreement with an additional long-distance exchange, Flat Rate Communications. The company has also been very aggressive in negotiating rock-bottom rates with foreign carriers for its international long-distance traffic. By passing on a portion of these savings to its customers, Cybertel has become very price competitive, increasing both its sales revenues and profit margins. At present, Cybertel's wholesale margins are approximately 30-50% higher than the industry average and significantly higher than reported in the company's earlier press releases. Even though Cybertel expects the wholesale division to continue generating significant profit, international long-distance capacity is a bulk product and the changes in overall demand and supply can reflect to the prices.

According to Richard Mangiarelli, CEO and president of Cybertel, "The original goal for our wholesale operation was to reach a $5 million sales volume by the end of first quarter of 2000. Our new goal is to reach a monthly volume of $1 million, or $12 million on an annualized basis, by the end of this year. Through our existing agreements, we believe we hold a competitive price advantage over our larger competitors, MCI Worldcom (Nasdaq:WCOM), Sprint (NYSE:FON) and Frontier Communications (NYSE:FRO), who can't presently meet these prices due to their overhead," says Mangiarelli.

To transport its telecommunications traffic worldwide, Cybertel is leasing a 96-port switch from General Telecom at 60 Hudson Street in New York. The switch partitioning agreement with General Telecom enables Cybertel to do just that. Cybertel leases the switch from General Telecom, buys international long-distance capacity in bulk, at discounted rates from major telecommunications carriers and then resells this capacity to other carriers.

Cybertel is a La Jolla, Calif.-based Voice Over the Internet (IP) Telephony Company. Cybertel is in the proc states. Cybertel's short-term strategy is to quickly expand its customer base through its unique marketing asdaq:QWST). Earlier this month, Cybertel announmpany to deliver IP Telephony calls originating perfectly into the company's IP strategy. "Our wholesale operation -- even though a profitable unit -- serves even a greater purpose as our test lab. It provides us invaluable information about international traffic patterns. We may base our future expansion plans on our internal traffic data, using it to determine exactly which countries to set up Internet Protocol based gateways in. In other words, we can expand first to those where our cost-structure is the lowest and volume potential is the highest, " describes Mangiarelli.

The statements made by Cybertel Communications Corporation may be forward looking in nature. Actual results may differ materially from those projected in forward-looking statements. Cybertel Communications Corporation believes that its primary risk factors include, but are not limited to: the need for substantial financial requirements; the need to develop effective internal processes and systems; the ability to attract and retain high quality employees; changes in the overall economy; changes in technology; the number and size of competitors in its markets; changes in the law and regulatory policy; and the mix of product and services offered in the company's target markets. Merger Communications (Merger) is a media relations firm employed by the Company. The statements and opinions presented here represent the views of the Company, not Merger, as the release is based on the information provided by the Company. Merger and the Company believe that all information in this release has been obtained from sources considered reliable, but cannot guarantee that the statements presented herein are accurate or complete. Merger's compensation for its media relations services, including preparation of press releases, consists of a monthly retainer and restricted stock. Merger or its employees may have a long position in the securities of the companies in which it distributes information to the media, and Merger may be buying or selling securities in the course of its regular business.