Phonetime Completes Phase I Of North American Network With VoIP And Private Facilities.

Business Editors

TORONTO--(BUSINESS WIRE)--Feb. 28, 2000

Phonetime Inc. (CDN:PINC.) announced that it has completed the first phase of its North American long distance network, combining VoIP - Voice over Internet Protocol and private leased lines. Phonetime's VoIP technology is from Vocaltec and Lucent and private line capacity has been leased from both Sprint Canada and AT&T Canada.

Wayne Silver, Phonetime's President said, "We continue to execute our business plan and have become one of Canada's emerging telecommunications companies. Phonetime is now recognized as one of Canada's largest sellers of phone time, with extensive distribution agreements including many Canadian telephone companies, major National Accounts and over 2,500 retail stores. Traffic in 1999 exceeded 100 million minutes with almost 50% to International destinations."

"In phase I of our private network build-out we have installed facilities in Toronto, Montreal, Ottawa, Vancouver and New York and are now carrying 20% of our International traffic over our VoIP facilities. In phase II we will increase our private network to include Calgary, Edmonton, Winnipeg, Hamilton and Los Angeles as well as rapidly expanding the number of International destinations we can reach via the Internet. Having our own network will help us achieve higher margins by eliminating variable minute costs. We will aggressively introduce many new and innovative telecommunications products, as we move more of our business and home products, services and fulfillment onto the Internet."

Silver added, "To handle the growing demand for our telecommunications and Internet services, we have constructed new and larger facilities to house our telecom and VoIP switching equipment. Integrated into our Toronto switch room is a "co-location" facility where we are providing managed services and wholesale network time to other long distance companies that wish to take advantage of our substantial purchasing power plus our network facilities, technical support personnel and call centre. Three telephone companies are currently using our Internet technology to access our switches and call centre from anywhere in the world. We have also attracted a number of long distance companies as tenants and have the capacity to expand these services to many new customers. Our co-location service should provide an additional revenue stream with significant gross margins while enabling us to expand our network much faster."

Phonetime is an emerging telecommunications company with a Class A International Carrier license and has received approval from the CRTC to proceed with its application to become a Competitive Local Exchange Carrier (CLEC). The company incorporates state-of-the-art VoIP, Voice over Internet Technology, a high capacity switching platform and an international network of carriers. Phonetime also operates a multilingual, 24-hour seven-day-per-week call centre dedicated to customer service and client retention.

Phonetime has developed a national sales distribution network and markets its own pre-paid long-distance cards under the following brand names: Millennium, Bravo and Nuvo. It also provides private branded cards to companies such as Blockbuster Canada, Business Depot/Staples and Future Shop amongst others. Phonetime continues its efforts to forge new strategic alliances within the global telecommunications sector. Phonetime's shares trade on the Canadian Dealing Network (CDN) under the symbol PINC. Currently, there are 32,890,083 common shares issued and outstanding. Phonetime's Web Site is http://www.phonetime.com/