Datacom Wireless Reorients Activities Around the Sale of Mobicom Fleet Management Solutions

LAVAL, QUEBEC , (TSX VENTURE: DAT), a Canadian leader in the design, development and marketing of mission critical vehicle fleet management and theft prevention solutions today announced its action plan to focus on Fleet Management solutions with its Mobicom product line and Mobiguard product, following the announcement by wireless network operators of their decision to cease providing analogue service.

Management initially believed that longer delays would be given by wireless network operators for the termination of analogue service but said termination is finally scheduled in November 2008. As previously indicated in the March 31st 2008 Management Discussion and Analysis report, this termination will mean that some 9,000 Mobilus and Vigil security units will be unable to send or receive signals, thus preventing them from detecting the theft of a vehicle or the transmission of its location. Because of this situation, there will be a loss of the recurring revenues that had been generated by these units, as of November 2008.

To maintain its recurring revenues, Datacom considered the option to replace analogue units now in service with their digital counterparts. Such replacement, would, however, have required the investment of $3,500,000 to $4,000,000, clearly not warranted by the products' levels of profitability. The Company's Board of Directors therefore decided not to offer the replacement of analogue with digital units and take this opportunity to concentrate its efforts on the Fleet Managament products where a larger potential of growth and profitability exists.

Furthermore, based on an economic analysis demonstrating the unprofitability of this sector of activity in this context, the Company will stop selling Mobilus and Vigil Digital products over the third quarter and will focus its efforts and financial resources around the sale of its flagship product: Mobicom, while continuing with the sale of Mobiguard product.

In July 2008, the Company also finalized its agreements with its principal clients with respect to the termination of analogue service. We shall maintain analogue service until the scheduled network shutdown date for analogue units in November 2008 and shall maintain digital service until December 31, 2010.

We estimate that the annual loss of recurring revenue for 2009 associated with analogue security products (the digital product will continue to generate revenues until December 31, 2010) will be approximately $1,085,000 with an estimated reduction in the gross profit margin of $520,000. Management expects to fully offset this loss of profit margin through cost-cutting efforts that were initiated in the second quarter and that will continue due to the reorganization that will follow the completion of this activity. Datacom will lay off about a dozen employees within the next two months in the course of this reorganization.

The anticipated cost of implementing the cost-reduction plan, expenses related to agreements we have finalized with our principal clients with respect to the termination of this activity and expenses for maintaining digital service until December 31, 2010 are estimated at some $525,000, which we plan to pay according to the following schedule: $475,000 in 2008 and $50,000 in 2010.

This decision complies with the action plan that the Company instituted at the start of the second quarter and that is designed to enhance the Company's profitability by orienting activities around profitable Fleet Management solutions and by cutting operating expenses.

About Datacom Wireless Corporation:

Founded in 1999, Datacom has grown to become one of the Canadian leaders in the design, development and marketing of mission critical vehicle fleet management and theft prevention solutions. Its products and services use wireless communications and satellite-based tracking technologies (GPS) and a state-of-the-art ASP information portal. For further information, visit www.datacom.com.

Forward-Looking Statements:

This press release includes certain statements that may be deemed "forward-looking statements". Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. All statements in this release, other than statements of historical facts, that address future events or developments that the Company expects or anticipates, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices and general economic, market or business conditions. There can be no assurance that forward-looking statements will prove to be accurate, as results and future events could differ materially from those anticipated statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

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Contacts: DATACOM Eric Morin General Manager 450-781-6006 [e-mail]