GERMANTOWN, MD, July 27, 1999—Start-up Internet Telephony Service Provider ePHONE Telecom Inc. (OTC: EPHO) expects to deploy at least 10,000 communications devices from TEK DigiTel (OTC: TEKI) in customer locations over the next 6 months.

With distribution being set up across Europe, and soon in North America and Asia, ePHONE’s deployment strategy is to offer its subscribers unlimited free voice and fax calls to 25 frequently called numbers anywhere in the world, in return for carrying their other long distance traffic at discounts of 20-80%. The ePHONE service, to be rolled out in September 1999, will also incorporate TEK’s VoiceServer.net technology to offer its free group calling service.

An agreement signed between the two companies projects deployment of 10,000 units this year and ePHONE projects an additional 75,000 in the year 2000. The initial 500 units have already begun shipping and units already installed at distributors in Belgium, Holland and Portugal.

This is the second ITSP to announce plans to support TEK’s V-Server iGATE and VoiceServer.net technology. TEK is ideally positioned to become the premier VoIP Customer Premise Equipment vendor, given TEK’s low cost, interoperability and ease of configuration. "Now that the Internet is an industry versus a phenomenon, it’s easy to forget that its great initial allure was in making things available for free," says Rocco DiCarlo, President, TEK DigiTel Corp. "One of the reasons we’re excited about working with ePHONE is that they’re bringing the initial concept of the Internet to telecommunications by making calls free or dramatically less expensive. By giving away the access device with their service to qualified customers, they are the first to follow the model used by the cellular providers as their market exploded."

ePHONE targets the small business/small office market to reduce dramatically their telecommunications costs using free and low-cost Internet-based services utilizing TEK DigiTel’s V-Server iGATE product. ePHONE will offer free calling services between iGATE devices and also allow users to place calls to any destination using managed IP networks and the Public Service Telephone Network at greatly reduced costs. ePHONE will bundle (at no charge to qualified customers) the two-port iGATE devices, which list for $1,299 (US), as part of their long distance service contracts.

"At ePHONE, we have recognized that the Internet marked the "death of distance" and the TEK iGATE will be instrumental in achieving our goal to bring the benefits of this paradigm shift to our customers. The iGATE gives us a tremendous amount of flexibility in terms of the connections and services we can utilize," says Robert Clarke, President of ePHONE. "The iGATE already supports ISDN, Dial-up modems, cable modems and xDSL access networks. Best of all, it’s engineered so that users can install it themselves, which means we don’t have to incur substantial field support costs or keep new users waiting for installation calls."

The V-Server iGATE combines Internet Protocol (IP) telephony, high-speed Internet access and IP routing at a low price point so ePHONE Telecom can offer complete, cost-effective service solutions that include state-of-the-art equipment. During Q3, TEK DigiTel will expand the capacity and functionality of its V-Server product family with integrated, full-feature PBX functionality, using Centrepoint’s (www.ctrpoint.com) award-winning technology.

About ePHONE (http://www.ephonetel.com)

ePHONE is a new global Telecom player, using cutting edge IP telephony technologies such as that developed by TEK DigiTel to make their slogan: "Reach across the world for the price of a local call"a reality. Initially targeting the small office / small business market, the service will be offered through telephone equipment distributors, Internet Service Providers, direct Internet sales, the retail trade and user referral. Distribution development in Europe has been underway for the past six months and market development in North America and Asia is to commence in August.

About TEK DigiTel Corporation (http://www.tekdigitel.com)

Based in Germantown, Maryland, TEK DigiTel Corporation delivers integrated CPE (Customer Premise Equipment) communications solutions optimized for use in SOHO, small- and medium-sized businesses. Working with Service Providers and OEM partners, the Company is focused on integrating fax- and Voice-over-IP (VoIP) technologies with conventional PBX systems and data routing devices to create a low- cost, easy-to-use Internet communications hub. Founded in 1998, TEK DigiTel is publicly traded (OTC BB: TEKI) and headed by a management team with extensive related experience gained at leading manufacturers and service providers including Motorola, 3Com, IBM, Nortel Networks, Rockwell, Hughes, MCI Worldcom, Bell Atlantic, Bell Canada, BellSouth, and GTE.

Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the development of the Internet as a commercial medium and carrier of telephony traffic, market acceptance risks, technological development risks, seasonality and other risk factors.