Trading Statement

RNS Number:8192T
Envesta Telecom PLC
05 January 2004

5 January 2004


                              Envesta Telecom plc

                           First Half Trading Update


Envesta Telecom plc, the alternative telecoms operator, today issues a trading
update for the six months ended 31 December 2003.


Envesta Telecom's principal subsidiary, Seven Telecom, continues to experience
unprecedented competition in the UK wholesale calling card market.  A programme
of cost cutting has been completed to bring the overhead base more into line
with the changing market environment.   However, results for the first half are
likely to show an operating loss despite Seven Telecom's broadly maintained
revenue levels and market share.  The sustained period of ferocious price
competition has reduced gross margins significantly and confirmed the Board's
view that an expansion of its geographical coverage into territories with higher
margins is essential.  Good progress has been made in the first half in
accomplishing this objective.


In August 2003, Envesta Telecom launched Eurotel Exchange, aimed at extending
the Seven Telecom product offer into the recently deregulated territories of
Southern, Central and Eastern Europe using its existing UK based infrastructure
and cost base, without the need for a physical presence in target countries.
Contracts have been negotiated with two major carriers; Albacom, a major Italian
telephony provider (25% owned by BT), and Jazztel, a leading second tier carrier
in Spain and Portugal.  After extensive market research, Eurotel Exchange has
opted to supply its own calling cards to consumers, rather than acting purely as
a wholesaler.  Distribution channels have been established through license
agreements with local country managers.  Launch dates of mid-January are
expected in Italy, late February in Spain and late March in Portugal.  Eurotel
Exchange's current wholesale revenues will be added to by the launch of these
consumer products in the New Year.


Matt Baker, previously Sales Director of Seven Telecom has been appointed
European Sales Director and will now concentrate on the growth of Eurotel
Exchange.


Lyndon Chapman, Chairman of Envesta Telecom, commented, "Seven Telecom's main
focus, the UK wholesale market, continues to be subject to severe margin
pressure but we are fortunate that the company's technology is widely
transferable, enabling us to target areas for expansion where the calling card
market is less developed and less competitive but offering significantly higher
margins.  The Board believes that Eurotel Exchange is in a strong position to
exploit opportunities we have created in Southern Europe.


"Eurotel Exchange is the first step in our strategy to broaden Envesta Telecom's
business model. It is the Board's intention to continue to evaluate acquisition
and investment opportunities which meet our strict financial criteria."


For further information please visit www.envestaplc.com or contact:


Lyndon Chapman, Chairman                             Rosie Brown/
Kevin McGovern, Finance Director                     Melissa Richards
Envesta Telecom plc                                  Tavistock Communications
Tel: [phone]                                   Tel: [phone]
[e-mail]                        [e-mail]


Notes to Editors


Envesta Telecom Plc is an alternative telephony provider specialising in
providing high quality telephony (minimum echo, minimum crackle, high
connectivity rates, etc) to the UK and European calling card markets through its
operating subsidiaries, Seven Telecom Ltd and Eurotel Exchange Ltd.


Seven Telecom owns London based infrastructure that is interconnected to
worldwide suppliers, Tier 1 carriers such as British Telecom and Deutsche
Telecom.


In the UK market, minutes are sold to wholesalers who produce, brand and
distribute pre-paid calling cards.  For the European market, Eurotel Exchange
will produce its own cards.


Calling cards offer the end user the ability to call anywhere in the world at a
significantly cheaper rate than the incumbent PTT, ie British Telecom in the UK.
With Seven Telecom's diverse range of Tier 1 suppliers this is not at the
expense of a reduction in quality.


Incoming calls, be they from the UK, Europe or Worldwide, use Seven Telecom's
unique IT and Network Infrastructure to divert calls to the most appropriate
supplier depending on destination and time of day.



                      This information is provided by RNS
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