Cybertel Communications Enters High-Growth DSL Market; Recently Acquired DSL Provider LDVL.com, Opens Up Multi-Billion Dollar Industry to VoIP Provider.

Business Editors & High Tech Writers

LA JOLLA, Calif.--(BUSINESS WIRE)--May 16, 2000

Cybertel Communications Corporation (OTC BB:CYTP) announced today that its recent acquisition of LDVL.com has opened up both the commercial business-to-business (B2B) and residential digital subscriber line (DSL) markets to expand its potential in online telecommunications services. According to International Data Corporation (IDC), both DSL markets are predicted to generate over $2 billion apiece by 2003. The acquisition provides Cybertel with LDVL's rapidly growing commercial DSL customer base and should play a key role in the establishment of its coast-to-coast telecommunications presence.

"The potential of the DSL market is virtually limitless," says Richard Mangiarelli, CEO of Cybertel Communications Corp. "This paves a high tech path - literally and figuratively - towards Cybertel's near term goal of becoming a nationwide VoIP (Voice-over Internet Telephony) service provider that can also offer the cutting-edge connectivity of DSL. By bringing LDVL under our wing, we now have the means and brain trust to expand into the multi-billion dollar DSL industry. Plus, we can rely on the experience of LDVL's team to help us increase the size of our VoIP network even quicker that we had earlier planned."

The DSL market is set to explode from 300,000 lines in use in 1999 to 2.5 million lines this year, according to the Wall Street Journal. The Yankee Group predicts that the number of U.S. residential subscribers with high-speed Internet access services should grow to 3.3 million by the end of this year and 16.6 million by 2004, up from just 1.4 million at the end of last year. In 1999, nearly 80 percent of all high-speed subscribers received their service through cable modems. By the end of 2004, the cable industry's market share is expected to shrink to about 42 percent, as DSL services become more widely available.

Cybertel acquired LDVL.com last month as part of its latest move to become the leading nationwide VoIP network service provider. LDVL.com has made a name for itself recently as a leading New York-based Digital Subscriber Line (DSL) service provider. Through the acquisition, Cybertel gained access to LDVL's high-speed Internet infrastructure and cutting edge technology expertise.

LDVL is currently targeting the commercial DSL market, pursuing over 27,000 businesses in the metro New York City area, with additional plans to expand along the Eastern Seaboard. The commercial DSL market - a natural complement to Cybertel's expanding residential customer base - has grown exponentially, adding over 30 million subscribers from the business community over the past two years.

"Establishing a growing presence in the high-tech telecommunications field is vital. Our acquisition of LDVL places us at the vanguard of this rapidly expanding market with a combined force of DSL and VoIP technology, in the residential and commercial sectors, from coast to coast," adds Mangiarelli.

LDVL.com uses Covad (NASDAQ:COVD) as its nationwide DSL service provider and Digex (NASDAQ:DIGX) as its global service provider for high-speed Internet access, web hosting and e-mail services. Redback Networks (NASDAQ:RBAK) supplies the company with its Subscriber Management Systems and it relies heavily on switching technology from Cisco Systems (NASDAQ:CSCO).

Additional companies focused on DSL services include Northpoint Communications (NASDAQ:NPNT), Rhythms NetCommunications (NASDAQ:RTHM), mPhase Technologies Inc. (OTC BB:XDSL) and DSL.net (NASDAQ:DSLN). Traditional telecommunications companies that are offering or planning to offer high-speed services in the future include Bell Atlantic (NYSE:BEL), Excite At Home (NASDAQ:ATHM) and US West (NYSE:USW).

Cybertel is very close to reaching its ultimate goal of being a Tier 1 telecommunications provider, serving customers via its own nationwide VoIP network. The company expects to be offering switched VoIP service across America this year. VoIP technology allows the worldwide usage of computers connected over the Internet to act as long distance phone lines, cutting out toll fees for calls.

According to IDC, Internet telephony markets represented only $1.6 billion in 1999. But, leading research organization Gartner Group's Dataquest, Inc. announced recently that the worldwide voice-over-packet services market would grow to $87 billion by 2004, with the U.S. being the dominating marketplace. Cybertel is positing to take advantage of that growing demand for low cost telecommunications service.

In the past, Cybertel has been a switchless carrier, acting as a wholesaler that buys long-distance capacity from large carriers and then resells that capacity to its customer base. Its customers' calls have been routed through other larger telecommunications companies' switches. The nation's largest traditional switched carriers include companies such as MCI/Worldcom (Nasdaq:WCOM), Sprint (NYSE:FON), AT&T (NYSE:T), Global Crossing (Nasdaq:GBLX), Qwest (Nasdaq:QWST) and Williams Communications (NYSE:WCG). Companies offering VoIP related services include ITXC Corp (Nasdaq:IXTC) and VocalTec (Nasdaq:VOCL).

The statements made by Cybertel Communications Corporation (Cybertel) may be forward-looking in nature. Actual results may differ materially from those projected in forward-looking statements. This information is not a recommendation to buy or sell securities Cybertel. The statements and opinions presented are the views of Cybertel and are subject to change. Merger Communications (Merger) is a media relations firm employed by the Company. Merger and Cybertel 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. Cybertel 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; changes in the overall economy; changes in technology; the number and size of competitors in its markets; continued and future strategic alliances; changes in the law and regulatory policy; and the mix of product and services offered in Cybertel's target markets. Merger Communications, its officers, directors and employees own 49,000 restricted shares of company common stock. In addition, Merger is entitled to additional compensation consisting of 77,000 shares of common stock or their equivalent pursuant to an agreement with Cybertel, which includes the preparation of press releases. Merger typically has a long position in the securities of the companies in which it publishes information, and Merger may be buying or selling securities in the course of its regular business.