SmarTalk Launches Prepaid Cellular at Retail with Kmart, Service Merchandise, Hills Department Stores, Fred Meyer, Ace Hardware, Fry's Electronics, Longs Drugs, Bradlees, Northern Auto, and BJ's Wholesale Club.

COLUMBUS, Ohio--(BUSINESS WIRE)--Sept. 23, 1998--SmarTalk Teleservices, Inc. (Nasdaq:SMTK) today announced the launch of prepaid cellular at retail with orders from Kmart, Service Merchandise, Hills Department Stores, Fred Meyer, Ace Hardware, Fry's Electronics, Longs Drugs, Bradlees, Northern Auto and BJ's Wholesale Club.

"Within 100 days of launching the prepaid cellular product, SmarTalk secured orders from some of the largest retailers in the United States. We expect to continue to leverage our industry leading prepaid position and retail expertise to secure additional distribution," CEO Erich Spangenberg stated. "The SmarTalk prepaid cellular phone should enable SmarTalk to capitalize on one of the most exciting segments of the telecommunications market. Statistics show that over 30% of those who apply for cellular service in the U.S. today are declined service due to insufficient credit. Our SmarTalk prepaid cellular phone targets these consumers and provides a convenient alternative for their cellular phone needs with no credit check. For budget conscious consumers and traditionally creditworthy but high-spending consumers such as traveling salespeople, the SmarTalk prepaid service is an excellent way to control cellular usage with no contract and no activation fees. Our retail partners recognize this tremendous opportunity," Spangenberg continued.

The new prepaid cellular phone product is also sold to consumers through direct-response broadcast advertising that features corporate spokesperson Dick Clark on most national cable stations, and will be sold on the Home Shopping Network later this year. SmarTalk continues to invest in direct response broadcast advertising to promote the new cellular prepaid phone system and has been identified by a recent Jordan Whitney Report as the No. 1 direct response advertising spot reinforcing the Company's "As Seen on TV" retailer programs.

With a suggested retail price of $99, the SmarTalk Prepaid Cellular Phone is manufactured exclusively for SmarTalk by Phillips Electronics and is packaged with a re-chargeable battery, a charger and $15 of talk time with the purchase of another prepaid cellular card. Cellular airtime for this program is provided by Shared Technologies Cellular. This SmarTalk prepaid cellular phone system gives consumers, who prefer to set a budget, an affordable cellular phone option and a hassle-free method for making calls nationally. Consumers may recharge their phone by purchasing additional time at retailers or through SmarTalk's customer service center.

SmarTalk Teleservices, Inc. is a leading provider of prepaid calling cards and prepaid wireless services. Based in Dublin, Ohio, SmarTalk maintains distribution agreements with the U.S. Postal Service and leading mass merchandisers, consumer electronics retailers, supermarkets, hotels, home office superstores and convenience stores throughout North America and the U.K. SmarTalk also creates promotional card programs for advertisers and corporate clients. Visit the SmarTalk website at www.smartalk.com.

Note: Certain statements made herein that are not historical in nature are forward-thinking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including: company launching the first-ever prepaid national coverage phone; phone being available in Kmart, Service Merchandise, Hills Department Stores, Fred Meyer, Ace Hardware, Fry's Electronics, Longs Drugs, Bradlees, Northern Auto, and/or BJ's Wholesale Club; phone appearing on Home Shopping Network later this year; prepaid cellular phone cards being available for purchase at retail this fall; the calling rates of the cellular phone; and, the company's investment in broadcast advertising. Investors are cautioned that all forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. These risks include, without limitations, risks relating to: the ability to maintain stable pricing per minute and the likelihood that prices may increase; various Kmart, Service Merchandise, Hills Department stores, Fred Meyer, Ace Hardware, Frys Electronics, Longs Drugs, Bradlees, Northern Auto, or BJ's Wholesale Club stores canceling phone orders or returning purchased units; delay of the commencement of phone sales over the Home Shopping Network; the potential for delay in SmarTalk's roll-out to other retailers who may carry the SmarTalk cellular phone system; the need to finance, delay and/or cancel any cable advertising and difficulty in maintaining stable relationships with carriers who provide cellular service. Investors who seek more information about the Company's business and relevant risk factors may wish to review the Company's SEC reports, including, without limitation, its Annual Report on Form 10-K for 1997 and its Quarterly Reports on Form 10-Q, as each of such documents may be amended.