Phonetime Inc.
TSX VENTURE : PHD
OTC Bulletin Board : PHOEF

Phonetime Inc.

December 20, 2007 08:00 ET

Phonetime Completes Acquisition of Symphony Telecom

Positions Company as a Top International Long Distance Wholesaler

MISSISSAUGA, ONTARIO--(Marketwire - Dec. 20, 2007) - Phonetime Inc. (TSX VENTURE:PHD)(OTCBB:PHOEF), one of Canada's leading suppliers of long distance telecommunication services, announced today that it has completed the acquisition of Symphony Telecommunications LLC for a purchase price of US$14.19 million. The purchase price is comprised of cash, convertible debentures and 12 million common shares of Phonetime Inc. The debentures have a minimum conversion price of CDN$1.00 per share. The financing of the acquisition was achieved with the support of a Royal Bank of Canada (RBC) credit facility consisting of an operating line of credit of $5 million, $1 million of equipment lease financing and $2.5 million of mezzanine debt.

The transaction, first announced on October 17, 2007, was completed by way of a purchase of all of the outstanding shares of Symphony's parent company, Symphony Holdings Inc. and at the same time, Phonetime has acquired Symphony's operations in Cape Town, South Africa. The Symphony companies will continue to conduct their operations as subsidiaries of Phonetime.

Through its acquisition of Symphony, Phonetime has evolved into a world-leading wholesaler of International Long Distance, processing over 5 billion minutes annually of worldwide Long Distance traffic with annualized revenue for 2007 of $150+ million.

Wayne Silver, Phonetime's President and CEO, stated that, "this is an outstanding acquisition for Phonetime. It is immediately accretive, with over US$50 million of new revenue, profitable and cash flow positive. In addition, the synergies between Symphony and Phonetime Network are tremendous. Each Company will grow organically off the other's direct routes and Phonetime Network's systems will enhance Symphony's efficiency. In addition our access to the Export Development Canada (EDC) financing and credit insurance will enable Symphony to expand faster with minimal credit risk. We are also very pleased that the founders of Symphony have agreed to continue to work with Phonetime to help us achieve of our goal of reaching $200 million in revenue in 2008."

Rodney Franklin, Phonetime's Chairman and CFO, added, "we were very careful to negotiate a purchase price and financing package with an objective to maintaining positive cash flow. We are pleased that RBC supported the Symphony acquisition and recognized the benefits for the long-term future of Phonetime. Their financing package and terms are very attractive and the overall interest rate is a blend of less than 10%. We are excited about the prospects of this acquisition, and hope it will enhance shareholder value in 2008."

About Symphony

Symphony Telecom is a privately held Delaware corporation with operations in Cape Town, South Africa and an administrative office in Virginia. Established in 2002, Symphony is a major provider of wholesale long distance and has direct relationships with nearly 200 International Telecom Providers worldwide, with particularly strong long distance routes to countries in Africa and South East Asia.

About Phonetime

Established in 1994, Phonetime is a leading Canadian supplier of wholesale long distance call delivery to large and small domestic and international carriers and provides International Long Distance telecommunication services for individual consumers and businesses as well. Phonetime Inc. is a publicly traded company and its common shares are listed on the TSX Venture Exchange (TSX VENTURE:PHD). Licensed in Canada as a Class A International Carrier by the CRTC, Phonetime operates one of the largest and most advanced private telecommunications networks in Canada. Phonetime has 40 Points-of-Presence in Canada, covering most major metropolitan areas effectively offering on-net service to approximately 85% of Canada's population. Phonetime also has connections in 140 countries around the world, with facilities in Canada, Europe and an administration office in Florida.

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 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.

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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