TLU Teleunit

RNS Number:2651X
Teleunit S.p.A
23 January 2006



Press release                                                   23 January 2006

                                 Teleunit S.p.A

                      ("Teleunit" S.P.A" or "the Company")

                              Review of operations

Teleunit S.p.A, the provider of fixed line telephony, wireless broadband,
international calling cards, and premium access number phone products, is
pleased to give the following update on its progress and strategy for 2006.

Following meetings held between Teleunit's management and key shareholders, the
Company is pleased to announce further details of its strategic investment
programme over the next two years aimed at accelerating Teleunit's growth in its
core markets.

The reorganisation of Teleunit's sales and marketing structure will in
particular focus on upgrading the Company's vendor network to further increase
sales. In particular, Teleunit is targeting two of its four high margin business
lines, namely Fixed Line, incorporating Voice over Internet Protocol (VoIP) and
5-Digit mobile content.

Fixed Line and VoIP

In Italy, VoIP is forecast to increase by 111% by 2008 (Source: Ovum). By 2008,
it is estimated that VoIP alone will have the largest share of the broadband
services market in Italy, worth approximately Euro 300 million (Source: MAP). In
consideration of this growing interest and having developed a full spectrum of
VoIP services the Company intends to concentrate on the development of this key
business line. Furthermore the Company's recent investment in IP infrastructure
means that the cost of services will be dramatically reduced going forward. To
take further advantage of the forecast growth in this market, Teleunit will be
expanding the marketing and sales departments through the acquisition of
experienced personnel. This will lead to more focused sales strategies and
product provision tailored to the current market, to the extension of our
existing sales network and to the exploitation of new sales opportunities. In
conjunction with further training and development of mid-level management and
Fixed Line personnel, it is expected that this business line play a significant
role in Teleunit's future growth.

5-Digit mobile content

Teleunit has demonstrated strong growth in its 5-Digit mobile content operation.
This market is expected to grow globally from Euro 20 billion of revenues in
2006 to Euro 37 billion by 2010 (Source: Ovum). Teleunit is pleased to report
that its customer base in 5-Digit mobile content has increased to over 260,000
current active subscribers up from 150,000 in July 2005. Given the tremendous
worldwide growth potential, Teleunit has been working to expand its 5-Digit
operation beyond Italy. Growth to date has been secured through continual
monitoring of market demand and precise response through targeted advertising
campaigns. In line with this successful strategy Teleunit intends to extend its
presence in this market through additional marketing initiatives to gain
heightened visibility across advertising media and to promote accelerated
customer acquisition.

Wholesale & Wireless Local Loop (WLL)

Teleunit's wholesale division is in a position to increase its contribution to
the bottom line in the years to come and the Company has focussed on further
strengthening this team to capitalize on the potential provided by this market.
International call volumes are continually increasing and, with the market
dominated by only a few operators, Teleunit will seek to assume an important
position in the provision of wholesale traffic in the years to come.

With current technological uncertainties regarding the best option for providing
last mile connectivity solutions, aggressive expansion of Teleunit's WLL network
has currently been put on hold pending the development and availability of
alternative technologies such as of WiMAX. To the extent that the licence
auctions for these alternative technologies have been delayed by the government,
the Company intends to exploit the significant growth potential of its existing
networks in Perugia and Tuscany, and position itself for first mover advantage
the moment licences for alternative technologies are awarded.

Management

Teleunit intends to continue investing in management, with the recruitment of
appropriate executives, along with training and development of the existing
team. The Company believes to currently have an optimal business mix and aims to
deliver and manage growth and enhance shareholder value.

Francesco Cimica, Chief Executive Officer of Teleunit, said: "Teleunit is facing
a bright future and is focusing on very exciting and fast growing innovations in
the telecommunications market, in particular VoIP and 5-Digit SMS. As stated in
our trading update on 16 January 2006, due to this strategic focus and as a
result of diversification away from premium access, we are moderating our
expectations of profit in 2006 with the benefits of this diversification
expected to be returned in 2007 and beyond.

"The investment that we are currently making into our network, along with
additional sales and marketing in the 5-Digit and VoIP divisions, will ensure
that Teleunit is better placed to benefit from opportunities within the
telecommunications sector. We are confident that this decision will deliver
improved returns for our shareholders. "

For further information:

Teleunit S.p.A

Francesco Cimica, Chief Executive                     Tel: +39 075 528 3939

Daniel Stewart
Tom Jenkins / Ruari McGirr                            Tel: +44 (0) 20 7776 6550
tom.jenkins@danielstewart.co.uk
Media enquiries:
Abchurch

Heather Salmond / Chris Lane                          Tel: +44 (0) 20 7398 7700
chris.lane@abchurch-group.com                         www.abchurch-group.com





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