Perth, Apr 28, 2006 (ABN Newswire) - The Board of CommodiTel Ltd (ASX: CMO) is pleased to advise of the Company's activities during the quarter ended 31st March 2006.

Summary

- Maiden profit of $46,077 during the Quarter. This has been achieved through achieving monthly income of approximately $385,000 (total revenue of $1,155,000 for the quarter) from the company's active customer base of about 40,000.

- The restructured board is actively reviewing opportunities to further strengthen the customer base and increase revenue.

- The Board also aims to build a multi-layered telecommunications company through pursuing merger and acquisition opportunities, additional products and expanded services.

- Corporately, the company will focus on consolidation and profit growth for the remainder of 2006.

CORPORATE ACTIVITIES

Board Restructure
During the quarter, the board was restructured. Managing Director Mr George Gelavis, non-executive Chairman Mr David Riekie, and non-executive Director Mr David Paganin resigned from the Board.

Mr Charles Morgan has joined the Board as the non-executive Chairman and Mr Roger Steinepreis as non-executive Director. Mr David Sweet has been appointed executive director with responsibility for day-to-day operations.

Successful Share Placement
In March, 2006 a placement of 75,000,000 shares was made to a number of parties at an issue price of $0.01 to raise funds for day-to-day operations of the Business. The placement included an attaching 1 for 2 option, subject to shareholder approval. Also subject to shareholder approval is the issue of 30,000,000 shares in this placement to the Chairman Mr Charles Morgan.

OPERATIONAL ACTIVITIES
During the quarter the AAPT customer base, purchased in December, 2005, was successfully integrated into the company's systems and operations. The number of customers recharging their prepaid mobile cards from this base was consistent with the assumptions made in evaluating the purchase. Proactive communication with customers in March resulted in additional revenue for the company above expectations.

The Revtel base which had been acquired over the previous 12 months via free airtime promotion has been consolidated. The number of customers who took the original offer but failed to recharge was significantly greater than expected. This led to an increase in the operational costs due to free airtime used in the December quarter, which was reflected in the last quarter's results and also in January, 2006. However, the free airtime given away during this original promotion has now been used, and any promotional offers in the future will be focussed on extra airtime and services coupled with a commitment to spending money with the company to achieve this reward.

The company is currently exploring more traditional ways of selling its prepaid services through a bricks and mortar approach both directly and through its partners. The company will continue to communicate to its customers via the internet but from an acquisition perspective the internet will play a much less significant role in the future.

The focus will be on profitable growth via a more traditional acquisition model. Acquiring or developing relevant content to sell to customers is a key area of focus, as well as creating more targeted propositions to meet the expectations of the general mobile community. A wider variety of call options is being explored, and over the next quarter these tariffs and solutions should be delivered to market.

Source:
Purple Communications
TEL: +61 8 9485 1254
FAX: +61 8 6263 0455

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