Cybertel Announces Second Quarter Numbers; Company Reports Strong Cash Position as Its Continues Expansion.

Business Editors/High-Tech Writers

SAN DIEGO, Calif.--(BUSINESS WIRE)--Aug. 15, 2000

Cybertel Communications Corporation (OTCBB:CYTP), a rapidly growing integrated telecommunications services provider, announced today that it filed its Form 10-QSB yesterday. In the quarterly filing, the company reported a strong cash position with $1.8 million cash as well as an unrealized net gain of $4,046,250 on marketable securities. Even though Cybertel's net revenues were down from the corresponding quarter in 1999, its gross margins increased significantly, now standing at 47.32% compared to 14.29% in 1999.

"Our numbers clearly reflect that we are heading in the right direction," says Richard Mangiarelli, CEO of Cybertel. "Much like our equity investment, our nationwide expansion and coming investments in the latest Internet telephony technology should yield great rewards for both our users and our shareholders."

Earlier this year Cybertel's Board made a strategic investment and as of June 30 that investment represented an unrealized gain of just over $4 million. As of the close of trading yesterday, Cybertel's investment was worth over $5.9 million, representing an additional unrealized gain of nearly $2 million more, which will be recorded in the next quarter.

Cybertel anticipates that it will produce $12,882,000 in revenue in the 2000 fiscal year and approximately $35 million in fiscal 2001. The company expects to turn profitable in 2001, with over $6.7 million in gross profits. The estimated growth in profitability reflects Cybertel's plan to employ 56 IP gateways throughout the U.S. as well as its greatly enhanced marketing activities. For example, Cybertel has increased its marketing efforts, and intends to build a captive agent network for direct marketing purposes

"During the first three months of 2000, our net revenues were $409,587, and we posted a net loss of $1,206,452, or $0.23 per share. The increased losses reflects the fact that we are moving away from the low margin international wholesale business and focusing most of our efforts on building our state-of-the-art 21st century 3rd generation network. This should greatly improve revenues for the last two quarters of 2000," adds Mangiarelli.

The company also announced recently that in an effort to attract an extremely large number of new customers, it has already doubled the size of its sales force and plans to hire highly seasoned, top performing agents from other major telecommunications companies. The company's goal is to have a sales force of 150 agents in place to be marketing Cybertel's telecommunications services in the 30 new markets it just announced. Cybertel is also launching a major integrated marketing campaign that includes a combination of targeted direct mail, advertising and public relations.

Cybertel customers will be able to place long-distance calls with 1+ dialing, at a rate of 7.5 cents/minute with no monthly service charges or minimums. Pre-paid calling card prices for these customers will also be extremely competitive, as low as 3.9 cents per minute. And, just by switching to Cybertel, all customers will be given Cybertel's new free dial-up Internet access.

Earlier this summer, Cybertel made its initial announcement that it is building the world's most advanced VoIP / VoDSL network. The network, which is expected to allow Cybertel to become the first major carrier focused exclusively on Internet telephony to introduce a VoIP network with 1+ dialing, will utilize 3rd generation technology. Once completed, the new network will enhance Cybertel's profitability by providing the company with higher margins on all of the services it offers. It will also put Cybertel in complete control of the network it uses.

About Cybertel Communications Corp.

Cybertel is a San Diego, Calif.-based fully integrated telecommunications service provider. It supplies a wide range of telecommunications services. Cybertel can offer highly competitive rates to its residential customers on long-distance, personal 1-800 numbers, calling card calls, high speed Internet access as well as completely free traditional Internet dial-up access with its Internet call waiting feature. For businesses, Cybertel offers a wide variety of value-added services. These included high-speed Internet access (DSL), virtual private networks (VPN), unified messaging as well as Web hosting services.

Cybertel (www.cybertelcorp.com) is also in the process of building a state-of-the-art Internet Telephony network throughout the United States. Cybertel plans to expand its network over the next year to include 56 gateways around the U.S., which will serve the entire country. The Sonus gateways give Cybertel a significant advantage over its competition. Once installed, Cybertel believes it will be the only company with an all-IP network capable of worldwide 1+ dialing.

The nation's largest traditional switched carriers include companies such as MCI/Worldcom, Sprint, AT&T, Global Crossing (Nasdaq:GBLX), Qwest and Williams Communications (NYSE:WCG). Companies offering VoIP related services include ITXC Corp (Nasdaq:IXTC), VocalTec (Nasdaq:VOCL) and Level 3 Communications (Nasdaq:LVLT).

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