ePHONE Telecom, Inc. Announces an Agreement-in-Principal with Saigon Post & Telecommunications Corp.

FREMONT, Calif.--(BUSINESS WIRE)--Dec. 10, 1999--

ePHONE Telecom, Inc. (OTCBB:EPHOE), on behalf of its wholly owned subsidiary, General Tel, Inc. is pleased to announce that it has signed an Agreement-In-Principle (AIP) with Saigon Post & Telecommunications Corp. (SPT) of Ho Chi Minh City, Vietnam for its Fixed Wireless Local Loop (WLL) project.

The ePHONE team led by Robert Clarke, Chairman & CEO and Charlie Yang, President & COO recently concluded negotiations to finalize the AIP. The AIP establishes the procedures and commitments by each party which are designed to conduct a feasibility test of the WLL system and also to lead to the Business Cooperation Contract for the design, construction and operation of SPT's WLL telephony network in Vietnam. The Business Cooperation Contract will provide for revenue sharing from the WLL system to ensure an appropriate rate of return for the investment.

Saigon Post & Telecommunications Corp. (SPT) has the authority to provide telecommunications services in Vietnam as part of the national telecommunications plan of adding 2,500,000 local telephone lines in the country. Due to the urgent need for the telephony infrastructure SPT has been seeking associations with foreign operators who can bring technology and expertise to the Vietnamese market. As a builder of Broad Band CDMA infrastructure and a New Telco Service Provider of the 21st Century, ePHONE has been chosen by SPT as its partner for the WLL project.

In collaborating with SPT, ePHONE will participate in building a complete WLL turnkey system. ePHONE's Wireless Local Loop system is designed to support high quality services featuring a combination of lower capital investment and rapid deployment compared to traditional wire line telephony solutions. The first phase of the WLL project will be initiated by a pilot study over the next four months in a selected site in Ho Chi Minh City.

Mr. Clarke commented, "This project is a good place for ePHONE to begin in Vietnam, because SPT was established in 1995 to rapidly deploy and provide telephony services in one of Vietnam's fastest growing cities. This project is expected to provide ePHONE with a base for growth in the future."

It is also the intention of both parties to adopt ePHONE's Internet Telephony Solution to offer Internet telephony services in the Vietnamese market in the near future.

About ePHONE Telecom

ePHONE Telecom, Inc. (http://www.ephonetel.com) is a leader of New Telco infrastructure and service provider for the 21st century. The ePHONE service capitalizes on leading edge Internet telephony technology to offer "low-cost/no-cost" long distance services and other telecommunications services through deployment of customer premise gateways, and ePHONE's global high-speed backbone.

FORWARD-LOOKING (SAFE HARBOR) STATEMENT

Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the development of the Internet as a commercial medium and carrier of telephony traffic, market acceptance risks, technological development risks, seasonality and other risk factors.