SOURCE: U.S. Starcom, Inc

May 12, 2006 09:12 ET

U.S. Starcom, Inc. Signs Formal Distribution Contract With Universal Music Group

Distribution to Begin in the United States and Mexico

PERTH AMBOY, NJ -- (MARKET WIRE) -- May 12, 2006 -- Ewire -- U.S. Starcom, Inc. (OTC: USTA) announced today that it has signed a definitive distribution contract with Universal Music Group for the distribution of prepaid phone cards packaged with Latin, Brazilian and Indian music CDs from the customer's stable of artists. Universal Music Group is the world's leading distributor of recorded music with an estimated worldwide market share of 26% of the entire music industry.

"The initial distribution launch will be for 500,000 pieces with a suggested retail price of $5.99," states John DiDomenico, President and CEO of U.S. Starcom. "The ultimate target is for the distribution of 6 million units as part of this agreement. We are thrilled to team up with such a leader in the music industry. We expect shipments to begin in the third quarter. This will be our first foray into combining music with minutes to the growing Hispanic marketplace, and should represent significant growth for us in years to come."

U.S. Starcom will be responsible for the distribution of the finished product known as CD-TEL, provided by Universal. The product will be distributed to approximately 25,000 locations controlled by U.S. Starcom, with the target demographic being urban communities in major metropolitan areas. U.S. Starcom will be responsible for the included prepaid phone cards, while the recordings and packaging will be provided by Universal. This distribution agreement will be managed by the east coast offices of U.S. Starcom in Perth Amboy, New Jersey.

About U.S. Starcom: A leader in providing value added prepaid services and solutions to enhance communications and entertainment. With a sales distribution network extending to thousands of urban locations, U.S. Starcom will continue its rapid expansion into the distribution of alternative communication products and services, including international long distance, prepaid phone cards, wireless dial around applications, stored value services and money debit cards, and internet service enhancements. U.S. Starcom is committed to providing affordable access to the latest entertainment offerings from the recording industry through strategic alliances and joint distribution campaigns. The company can provide product development, distribution, and system installation through its two independent subsidiaries, Sky Distribution and U.S. Starcom Technologies, formerly known as Infinite Technology, Inc.

Safe Harbor Statement: This press release contains forward-looking statements that involve risks and uncertainties. This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend," "promise," "seeking to," "negotiating to" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

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