Phonetime Inc.

Phonetime Inc.

March 04, 2008 08:00 ET

Phonetime Hits Year-to-Date Record Revenue of Nearly $25 Million

Company Initiates Major Network Expansion to Meet Growing Demand

MISSISSAUGA, ONTARIO--(Marketwire - March 4, 2008) - Phonetime Inc. (TSX:PHD), a leading supplier of international long distance telecommunication services, announced today that it is accelerating the expansion of its telecommunications network. This expansion comes as a direct result of two consecutive months of record revenue, totalling nearly $25 million, and the anticipated continued growth due to the integration of the recently acquired Symphony Telecom. The 2008 year-to-date revenue is 80% higher than the first two months of 2007 and already surpasses the entire Q1 - 2007 revenue of $21.3 million.

Phonetime has placed orders with Alcatel-Lucent, its main switching hardware provider, as well as other key suppliers for its VoIP network infrastructure in Toronto. Phonetime is also in the process of completing the move of its telecommunication switches into new network co-location facilities built specifically for them by Bell Canada. These new facilities are maintained by the same property management and security service used by Bell. The new space is double the size of Phonetime's previous location and allows for continued expansion into the foreseeable future.

To accommodate its rapidly growing international VoIP traffic, Phonetime has placed IP bandwidth orders with Level (3) Communications and Bell Canada for additional capacity. Orders have also been placed with both Bell Canada and Telus Corporation for additional domestic facilities to support the growing demand on its Canadian network, which is already one of the largest privately held networks in the country.

Wayne Silver, Phonetime's President and CEO, commented, "It is noteworthy that this new phase of network expansion will allow us to generate up to $50 million of additional revenue with an investment of less than half a million dollars. To accommodate this added revenue, most carriers would require a significantly greater expenditure on equipment and facilities; however, our highly robust proprietary software systems and unique network architecture allows us to leverage every dollar we spend on equipment into 100 times of additional revenue giving us one of the lowest cost infrastructures in the world. We believe that as Phonetime grows, our systems will provide us with a continuing competitive advantage and even higher profit margins."

Rodney Franklin, Phonetime's Chairman and CFO, stated that, "With the integration of Symphony Telecom moving even smoother than anticipated, our wholesale business is routinely seeing week-over-week growth of 8 to 10%. The reality is that we need to expand our network now in order to continue to provide a high level of service to our existing customers as well as the added capacity required to accept the high volume from international carriers wishing to connect to our network." Mr. Franklin added that, "We believe we are now one of the three largest Canadian carriers of international wholesale minutes and one of the top 100 companies in the world selling international traffic. The profile of Phonetime across the International Telecom community has never been higher and we anticipate our growth will continue throughout the year."

About Phonetime

Established in 1994, Phonetime is a leading international supplier of wholesale long distance call delivery to large and small domestic and international carriers as well as providing retail international long distance telecommunication services for individual consumers and businesses. Phonetime Inc. is a publicly traded company and its common shares are listed on the TSX (TSX:PHD). Phonetime is licensed in Canada as a Class A International Carrier, and is a vertically integrated telecommunication provider of both wholesale and retail operations. Phonetime now has 140 staff located on six continents and has facilities in Canada, Europe, Africa and South East Asia. Its wholly owned subsidiaries and divisions include; Phonetime Network, with operations in Toronto and Florida offering International Long Distance to ILEC's CLEC's and PTT world-wide; Symphony Telecom, with operations in Oaktown, Virginia and Cape Town, South Africa, which offers "direct" telecommunications facilities to "hard to reach" but highly profitable routes in Africa and South East Asia; Call Select, with an 80-seat call centre in Vancouver, offers retail 1+ long distance home service to more than a dozen ethnic communities across Canada; Phonetime International operates one of Canada's largest private networks with 40 Points-of-Presence, covering 85% of Canada's population. Phonetime International sells its excess Canadian network capacity on a wholesale basis to major carriers world-wide, as well as distributing long distance calling cards via nearly 2,500 retailers across Canada.

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

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