aeroTelesis to Form Technical Cooperation Partnership with Mabuhay Satellite Corporation for Joint Development of USM-based Broadband Satellite Services.

LOS ANGELES -- aeroTelesis, Inc. (OTCBB:AOTL) announced today the signing of a Memorandum of Understanding (MoU) with Mabuhay Satellite Corporation ("Mabuhay"), a subsidiary of Philippine Long Distance Telephone (PLDT) Company, providing satellite communication and public network services, in order to jointly develop enhanced broadband satellite services for the Philippine market.

The strategic partnership will focus on investigating the opportunity to integrate aeroTelesis' core USM (Ultra Spectral Modulation) technology platform into Mabuhay's existing satellite communications network to establish new, cost-effective broadband services and to engage in other communication activities. At this time, the common objective of both companies is to determine the viability of USM technology for new value-added services which currently cannot be achieved through conventional methods of modulation. Upon a successful evaluation and field trial, the parties plan to enter into the joint commercial deployment of USM in the Philippines and other neighboring countries where Mabuhay currently offers its services.

With USM's ability to achieve fast data rates and spectral efficiency, both parties envision the following applications of the technology for Mabuhay's satellite network:

--Broadband services for content contribution and distribution

--Capacity increase in satellite transponders

--Backhaul services

--Satellite-based IP services

--Other satellite and wireless-related applications

"The formalization of this alliance represents a great opportunity and milestone achievement for aeroTelesis. It will lay the groundwork for the Company's first international satellite partnership and the potential integration of USM into an existing satellite network. The successful launch of USM technology in this region will serve to commercially demonstrate the power and cost-effectiveness of the technology and provide us with a platform from which to leapfrog into neighboring regions," commented Jagan Narayanan, Chairman and CEO of aeroTelesis.

"Mabuhay is keen to work with aeroTelesis on the development of the USM technology which would effectively further multiply the capacity of existing satellite connections. Considering the competitive environment today, where satellite operators not only compete with each other, but with fiber-based backbone operators, USM will be a breakthrough for all satellite operators as it helps increase returns on their investments in space," added Gabriel Pimentel, President and CEO of Mabuhay Satellite Corporation.

The MoU contemplates:

--the sharing of technical information relating to USM technology on a confidential basis, including access to key members of aeroTelesis' technical team;

--the invitation to Mabuhay to a field demonstration of USM technology in the next 90 to 120 days; and,

--the possibility of a field trial in the Philippines at the end of the year, with implementation targeted for 2005

For aeroTelesis, this partnership fits into its strategy to develop new and innovative services based on USM technology. It also marks the commitment taken by aeroTelesis to collaborate with major strategic partners in order to leverage resources and expertise and jointly offer the best services to end customers.

Use of the terms "partner" and "partnership" does not imply a legal relationship between aeroTelesis and any other party, including Mabuhay. At the present stage, this MoU is meant to be a non-binding agreement between aeroTelesis and Mabuhay and should not be understood as a definitive agreement.

About Mabuhay Satellite Corporation

Mabuhay Satellite Corporation (MPSC) has successfully forged its way into the competitive international satellite communications arena by offering competitive video, IP, and telecommunications solutions for clients in Asia and North America. Mabuhay's Agila II satellite, with its already expansive Asia and transpacific coverage, is further complemented by the connectivity of Philippine Long Distance Telephone Company (PLDT) -- its parent company -- and by strong entrepreneurial relationships with major teleport operators and integrators in Asia and the USA. With these networks Mabuhay can provide interconnectivity to major fiber and satellite-based communications networks in Asia and the Americas. Moreover, the Agila II satellite is listed on the U.S. Federal Communications Commission's (FCC) Permitted Space Station List making it easier for U.S. licensed earth stations to communicate with Agila II. MPSC welcomes existing and burgeoning teleport operators based in Hawaii to access Asia through Agila II. Mabuhay Satellite Corporation continues to host broadcasters, international news agencies, teleport operators, international channels, for their domestic and international distribution requirements. In the coming years, Mabuhay will continue to provide clients with reliable, efficient, and extensive satellite-related services for the evolving communications market. For more information on Mabuhay Satellite Corporation, please visit www.mabuhaysat.com.

About aeroTelesis, Inc.

Headquartered in Los Angeles, aeroTelesis is an international wireless telecommunications company providing next-generation technologies and services for the delivery of voice, data and video. The Company's targeted application markets include mobile, wireless broadband, Voice over Internet Protocol (VoIP), and satellite communications. The Company's core technology platform is a licensed modulation technique known as Ultra Spectral Modulation (USM). USM is a technology that significantly increases spectral efficiency in wireless applications and provides for high-speed and high-capacity networks at substantially lower cost relative to existing wireless technologies. USM is designed to avoid bottlenecks by providing data transmission channels with higher quality and throughput rates than those of conventional modulation techniques. For more information on aeroTelesis, Inc., please visit www.aerotelesis.com.

This press release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include, but are not limited to, the Company's growth strategy, future milestones and projected operations. Forward-looking statements are inherently subject to uncertainties and other factors, which could cause actual results to differ materially from the forward-looking statements. These factors and uncertainties include: the Company's ability to develop and commercialize its USM technology, expand its operations to meet anticipated demand; the ability of the Company's technology to achieve anticipated benefits for its customers; ability to secure operating licenses in host countries; anticipated growth of the Company's target markets; unanticipated delays in manufacturing or shipments to customers, and its ability to achieve anticipated sales and profits. The Company refers interested parties to its most recent Annual Report on form 10K and its other SEC filings for a description of additional uncertainties and the factors that may affect forward-looking statements. Forward-looking statements are based on information presently available to senior management, and the Company has not assumed any duty to update its forward-looking statements.