Cybertel Communications Corp. - VoDSL Making Inroads into Baby Bells' Markets by Reducing Business' Dependency on Expensive Local Phone and DSL Services.

Business Editors

SAN DIEGO--(BUSINESS WIRE)--Sept. 7, 2000

Cybertel Communications Corp. (OTCBB:CYTP)

The American high-speed Internet market continues to develop by leaps and bounds.

Earlier this summer, two of the largest telephone companies in the U.S, SBC Communications and Verizon Communications announced that they had put their high-speed Internet businesses in the hands of smaller national competitors, Prodigy Communications and NorthPoint Communications, respectively.

Clearly, newer players are driving the market development. For example, Cybertel Communications Corp., which is focusing primarily on building a Sonus Networks-based state-of-the-art IP network throughout the U.S., recently acquired LDVL, Inc. a leading DSL service player in New York City and several other major East Coast metropolitan markets. LDVL, which stated today that it will begin operating under the new name Cybertel East, is focusing on providing DSL and Voice over DSL (VoDSL) services to upscale residential customers and small business users - the most profitable market segment in telecommunications - on the East Coast. The Cybertel subsidiary expects to grow rapidly in this expanding market segment.

The DSL market continues to grow. DSL is going be available to at least 70% of U.S. homes by 2004, and according to Telechoice the number of Voice over DSL lines (VoDSL) will mushroom to 7 million by 2004, almost 20-fold from the current penetration levels. The adoption will be even faster in the corporate world. Businesses of all sizes and types are turning to DSL as the preferred means of utilizing faster and lower cost Internet access.

"Cybertel East is ideally positioned to take advantage of this growth," said Richard Mangiarelli, CEO of Cybertel Communications Corp. "It has an existing sales force and a product offering that should enable us to produce up to $74 million in sales in the East Coast alone in 2001. It has working relationships and/or signed contracts with many of the industry's leaders, such as Intermedia, Covad, Digex, AT&T and Microsoft."

Even though the bulk of Cybertel East's revenues may come from DSL services, VoDSL is just around the corner. It allows carriers to split a single DSL Internet connection into multiple voice circuits, allowing one copper wire to carry several voice calls, giving business customers multiple lines at very low costs.

"DSL is rapidly changing the marketplace. Most small businesses spend 900% more on local voice traffic than they do on data. They are used to spending exorbitant amounts on local phone service. But, by bundling voice and data and delivering them via VoDSL and a broadband pipe over the Internet, we can create the types of bundled packages that can alleviate the need for small businesses to pay an arm and leg for their local phone service," Mangiarelli explains.

These developments can make Baby Bells feel extremely uneasy. When small businesses realize that they don't have to pay for local phone service anymore, they will start taking their business to companies like Cybertel. Traditional telecommunications players are teaming up with newcomers as a last resort to capture market share in the market situation.

Bundled service packages are already on their way. Cybertel is already offering all of its customers free dial-up Internet access, a new service that has enabled Cybertel to rapidly expand its customer base without jeopardizing its profitability. The offer has been enthusiastically received by the company's growing customer base.

"It is highly possible that in the very near future, any businesses who utilize value-added high-end telecommunications services will end up getting their local dial tone for free or next to nothing. Voice traffic is clearly moving from the traditional circuit switched network to IP based networks," says Mangiarelli.

Earlier this summer, Cybertel announced that it plans to build 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 rely heavily on technology from Sonus Networks. 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 La Jolla, 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.

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