Phonetime Inc. Revenues Increase 27% In 1st Quarter; Quarterly Profits Exceed $1.5 Million.

Business Editors

MISSISSAUGA, Ontario--(BUSINESS WIRE)--June 3, 2002

TSX Venture Exchange (CDNX): YPO

Shares Issued and Outstanding: 42,123,283

Continuing to build on the outstanding results of 2001, Phonetime(TM) is pleased to announce its strongest quarter ever, with record sales and profits in the first quarter of 2002.

Performance highlights for three months ending March 31, 2002:

-- Sales in the first quarter of 2002 increased by 27.8% to $6.502 million from
$5.089 million for the same period in 2001.

-- Gross profits were $1.795 million, a 32.0% increase over the $1.361 million
realized in the same quarter of 2001.

-- EBITDA rose to $1.839 million in the first quarter of 2002, a marked
increase over the $288,481 posted in Q1, 2001.

-- Net income was $1.577 million in the quarter, versus $85,694 in the same
quarter of 2001.

-- Earnings per share rose to $0.037 compared to $0.001 in the previous period,
an increase of 1,850 percent.

"Q1 was an great quarter for Phonetime, with excellent sales and margins," said Wayne Silver, President & CEO. "The strong year-over-year improvement signals that the goal to increase our Canadian market share in 2002 is on track, and that our business model has the right components for continued success."

"In the quarter, management improved the company's balance sheet by restructuring a major creditor's long-term debt for future equity in the form of warrants," Mr. Silver added. "This resulted in an extraordinary gain of $1,194,395 for the quarter. Phonetime is now poised for significant growth and market appreciation as we continue our aggressive network expansion beyond our current 21 Canadian cities."

"Most significantly, the company's costs increased at a much slower rate than our sales, reflecting Phonetime's strong cost containment efforts," said Jeff Chelin, CFO. "While sales grew by more than 27 percent, our costs increased only 7 percent, a noteworthy accomplishment that is reflected in our bottom line."

"Subsequent to the quarter's end," continued Mr. Silver, "Phonetime was named Canada's third-fastest-growing company by Profit Magazine. This is a real honour, and a tribute to the efforts of Phonetime's staff, who are focused on both sales and profits."

Selected financial information

-----------------------------------------------------------------
                              Expressed in Canadian $
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                        Three months            Three months
                 ended Mar. 31, 2002     ended Mar. 31, 2001
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Sales                     $6,501,975              $5,089,389
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EBITDA                    $1,839,231                $288,481
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Net earnings              $1,577,461                 $85,694
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Basic E.P.S.                  $0.037                  $0.001
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Phonetime is one of Canada's fastest growing telecommunications companies. The company has built one of Canada's largest private networks into 21 cities with plans for a further 11 cities to be added by the end of 2003. Phonetime's retail and wholesale telecommunications services incorporate state-of-the-art VoIP-based technology for commercial applications, high-capacity switching platforms, and an international carrier network. Phonetime also operates a multilingual customer-service call centre and sells its own branded pre-paid cards under the names; NUVO, BRAVO, Chit Chat and Call Value, in addition to providing phone cards to over 2,000 retail outlets, including Real Canadian Superstores, Staples/the Business Depot and Future Shop. Licensed as a Class A, International Carrier by the CRTC, the company currently has offices in Toronto, Vancouver, and Montreal.

FOR FURTHER INFORMATION PLEASE CONTACT:

Wayne Silver

President & CEO

Phonetime(TM) Inc.

TEL: [phone] ext. 304

FAX: [phone]

[e-mail]

Richard Mellon

Investor Relations

Phonetime(TM) Inc.

TEL: [phone] ext. 353

FAX: [phone]

[e-mail]

W. Daniel Mothersill

Managing Partner

Ciris International Inc.

TEL: [phone]

FAX: [phone]

[e-mail]

www.phonetime.com

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.