Direc-to-Phone, International, Inc., a Subsidiary of STM Wireless, Inc., Receives Order Valued Over $100 Million from Miditel in Mexico.

IRVINE, Calif.--(BUSINESS WIRE)--Oct. 10, 1997--STM WIRELESS, INC. (NASDAQ NM Symbol: STMI), today announced that its subsidiary, Direc-to-Phone, International, Inc., has been awarded a 10 year service contract by Miditel to provide a nationwide satellite network for telephony and data services throughout Mexico. Miditel is licensed to provide telecommunications services in Mexico including local, domestic long distance and international connections. The contract calls for a minimum of 7,500 satellite phone lines to be installed in 2,500 initial locations, which currently do not have adequate communications facilities. In addition, Miditel plans to use satellite and wireless technologies to provide high quality telecommunications services through a rapid build-up of facilities in major market segments. Miditel is owned 51% by a Mexican partner and 49% by Korea Telecom.

STM has already commenced deliveries of equipment that is expected to be completed over a 24 month period. The contract calls for turnkey service to Miditel through an STM subsidiary called "Direc-to-Phone International, Inc", which was established for the purpose of offering fixed satellite telephony and advanced data services in emerging markets.

Emil Youssefzadeh, STM's President and CEO, said, "Our vision for Direc-to-Phone International (DTPI) is to become the preeminent provider of direct to home satellite telephone and data services in developing countries. The lack of adequate telecommunications infrastructure, coupled with low penetration of basic telephone service and the need for rapid deployment, makes satellite networks a more attractive solution. Unlike mobile satellite systems, DTPI is positioned to use the substantial capacity available in the geo-stationary orbit to offer telephone and data services at a fraction of the cost of medium or low orbit constellations."

He continued, "Our market is not targeted toward high-end business users requiring mobility. Our focus is on users needing basic services at their home or office, and our goal is to push the technology and create a mass market by constantly improving and reducing the cost of user terminals."

Dr. Kim, Chief Operating Officer of Miditel, said, "The decision by Miditel to select STM Wireless as our supplier and technology partner was the culmination of months of evaluation and a search for a provider of robust and expandable products that can meet our current and future needs with field-proven technology."

Korea Telecom, Miditel's operating and financial partner, is one of Asia's leading telecommunications operators with years of experience in the deployment of advanced communications and wireless technologies. Korea Telecom, which is currently government owned, has been rapidly evolving in the face of deregulation in its local market and has been strategically positioning itself for effective expansion both in the domestic and international markets.

The contract with Miditel will use a combination of various products manufactured by STM Wireless, including the DAMA 10000 network system, the Subscriber Earth Station(TM) (SES) and the SPACEWEB(TM). The DAMA 10000 product family, in conjunction with SES, provides cost effective mono-channel and multi-channel solutions for implementation of fully interconnected network services. The data capabilities incorporated in the DAMA 10000 provide advanced circuit and packet switched services for both bandwidth-on-demand, as well as frame-relay applications, including support for E1/T1 interfaces. DAMA 10000 can be deployed as a backbone switching and transmission infrastructure for wireless local loop systems, for heavy route traffic and traditional backup services; interconnection of major telephony switching centers; backbone infrastructure for cellular networks; and gateway access to international PSTN. The DAMA 10000 and SPACEWEB product families offer opportunities for organizations and companies to deploy full-featured, digital telecommunications systems quickly and economically. These products support a full range of communications services through the use of standard protocols for data and telephony, which allows remote offices to be fully integrated with corporate offices as if they were co-located.

Among its features, the DAMA 10000 and SES terminals offer communication service providers full-mesh, expandable, multi-service capability. This makes it possible for users to call from any remote site to any other remote site within the entire network, eliminating the need for a central hub. The STM product family uses centralized DAMA processing similar to switching and resource allocation functions performed in cellular networks. This architecture is more robust as compared to distributed DAMA processing, which is prone to problems encountered with any distributed data base management system. Single point-of-failures are avoided in central DAMA processing using fault tolerant or high availability computers, much the same way other telecommunications and switching systems operate. DAMA 10000 also has the capability for full support of R-2 signaling used in most international telephone networks, with the capability to build tariff tables, provide caller ID and support other advanced features.

STM Wireless, Inc., headquartered in Irvine, California, is an international provider of wireless communications solutions including VSATs (Very Small Aperture Terminals) for voice, data, and video applications with networks installed in over 20 countries. In addition to its supply of satellite network systems, the company has two subsidiaries involved in related businesses. Direc-to-Phone International is a service subsidiary that uses products manufactured by STM to enter into operating agreements with local partners to provide turnkey services generating long-term service revenues. Telecom Multimedia Systems, Inc (TMSI) is a technology subsidiary focused on Internet telephony offering products and digital signal processing solutions that offer low delay high quality voice over IP solutions. For more information please visit STM's Web Site at www.stmi.com .

With the exception of the actual reported financial results, the statements made in this news release are forward looking statements that involve risks and uncertainties. As discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 1996, and its Form 10-Q for the first two quarters of fiscal 1997, the Company's future operating results are uncertain and may be impacted by the following factors, among others: the long-term cycle involved in completing major contracts, particularly in foreign markets; increasing competitive pressures; general economic conditions; technological advances; the timing of new product introductions; political and economic risks involved in foreign markets and foreign currencies; and the timing of operating and other expenditures.

CONTACT: Corporate Communications:

Joe Wallace, 714/789-2679

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Kris Otridge, 415/433-3777

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Web Site: www.stmi.com