Phonetime Inc.
TSX VENTURE : PHD
PINK SHEETS : PHOEF

Phonetime Inc.

January 23, 2007 11:11 ET

Phonetime Expects Record Volume and Increased 4th Quarter Revenue

MISSISSAUGA, ONTARIO--(CCNMatthews - Jan. 23, 2007) - Phonetime (TSX VENTURE:PHD)(PINK SHEETS:PHOEF) announced today that its sales revenue for the 4th Quarter is expected to exceed $8 Million, which will represent an increase of more than 60% from the same period last year. December minute volume was approximately 148 million minutes, which is the Company's highest recorded long distance minute volume of phone traffic for a single month and represents an increase of almost 250% over the same month last year.

Management believes that the Company's recent emphasis on wholesale long distance sales is the reason for the increased volume of both minutes and revenue. Phonetime expects to experience continued growth in both these areas in its 2007 Fiscal Year.

Wayne Silver, President & CEO of Phonetime Inc. stated, "We are thrilled with the expected revenue results of our 2006 fiscal year, and take this opportunity to share with our shareholders and the investing public the successful results of our new wholesale strategy. Sales revenue for December 2006 will exceed the combined revenue for the previous two months. Phonetime is adding new wholesale customers and suppliers on a regular basis and anticipates continued growth throughout 2007."

Rodney Franklin, Phonetime's Chairman added, "The International Telecommunications Industry has welcomed us as a new major wholesale supplier and we have signed new contracts with many major ILEC's, PTT's and VoIP Carriers. We hope to connect to over 100 new carriers on our Network in the New Year. Our proprietary software program that controls the wholesale network operation, including sales and credit levels, is providing us with an advantage that is expected to allow us to grow our business aggressively."

ABOUT PHONETIME

Established in 1994, Phonetime is a leading Canadian supplier of International Long Distance telecommunication services. Phonetime Inc is publicly traded, listed on the Toronto Venture Exchange (TSX VENTURE:PHD). Licensed in Canada as a Class A International Carrier by the CRTC, Phonetime operates one of Canada's largest and most advanced private telecommunications networks. Phonetime has facilities in North America and Europe and Canada where it has 39 points-of-presence in most major metropolitan areas, effectively offering on-net service to approximately 85% of Canada's population.

Phonetime's balanced portfolio of services includes retail products for individual consumers and businesses as well as wholesale long distance call delivery to large and small domestic and international carriers, offering both pre-paid and post-paid services. This balance enables Phonetime to maximize revenue from the utilization of available capacity and to minimize costs through volume.

In October 2006 Phonetime completed a US$4 million dollar private placement in order to stimulate growth of international wholesale and domestic 1+ service.

Caution Regarding Forward Looking Information:

This press release contains forward-looking statements within the meaning of securities laws, including the "safe harbour" provisions of the Ontario Securities Act and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements in this press release include, but are not limited to, statements with respect to the anticipated revenue for the fourth quarter of fiscal year ended December 31, 2006 and for the fiscal year ended December 31, 2007.

Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to Phonetime concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: incorrect assessments of value when making acquisitions; increases in debt service charges; fluctuations in foreign currency and exchange rates; inadequate insurance coverage; changes in tax laws; and Phonetime's ability to access external sources of debt and equity capital. Further information regarding these factors may be found under the heading "Risk Factors" in our management's discussion and analysis for the year ended December 31, 2005.

The foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release, and Phonetime does not undertake any obligation to up-date publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The TSX Venture Exchange has neither approved nor disapproved the contents of the press release.

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