Teleconnect Signs Letter of Intent to Acquire Majority Stake in Star Mobile Solutions S.L.

  
    
  
  
    
      Teleconnect, Inc. (OTCBB:TLCO) announced today that it has signed a 
      Letter of Intent to purchase a majority stake in Star Mobile Solutions 
      SL (SMS); a Spanish mobile phone repair company. Though the terms of the 
      agreement have not yet been released, the acquisition, which is expected 
      to be executed before the end of December 2006, will immediately double 
      Teleconnect’s turnover and bring a positive 
      Net Income contribution to the Company’s 
      consolidated financials.
    
    
      Teleconnect Inc. President, Gustavo Gomez explains, “We 
      have identified SMS as an attractive potential acquisition due to its 
      complementary nature to our expansion strategy and its bottom-line 
      profitability. SMS will allow Teleconnect to start offering value-added 
      services to mobile phone users in line with our business plan. Expanding 
      to other markets will be more attractive if we include in our portfolio 
      mobile prepaid services in addition to our fixed-line prepaid service 
      offering.”
    
    
      About Star Mobile Solutions SL:
    
    
      Star Mobile Solutions SL is a privately held mobile phone repair 
      organization set up in 2002 in Madrid Spain. They have grown 
      exponentially in the market, becoming number 5 of 14 similar companies. 
      SMS has experienced 90% annual growth since inception reaching an 
      estimated 7,8M€ turnover by the end of 2006. 
      Today, SMS has over 100 people on staff and 4 locations and require 
      investment to keep up with customer demands for additional service. They 
      plan to again double turnover and profit within the next 2 years.
    
    
      About Teleconnect:
    
    
      Teleconnect Inc. through its wholly-owned subsidiary Teleconnect 
      Comunicaciones S.A., a Spanish telecommunications company, is a major 
      player in the prepaid telecoms industry in Spain. Teleconnect Inc. is 
      traded on a U.S. stock exchange, the Over The Counter Bulletin Board 
      (OTCBB) with trading symbol TLCO. Teleconnect provides commercial and 
      residential users in Spain with a very competitive array of prepaid 
      services. www.teleconnect.es
    
    
      Forward Looking Statements:
    
    
      Except for the historical information contained herein, the statements 
      in this press release are forward-looking statements that involve risks 
      and uncertainties. Potential risks and uncertainties include, without 
      limitation, continued competitive pressures in the marketplace; the 
      effect competitive and economic factors and the Company's reaction to 
      them may have on consumer and business buying decisions with respect to 
      the Company's products; the ability of the Company to make timely 
      delivery of new products and successful technological innovations to the 
      marketplace; the continued availability of certain components and 
      services essential to the Company's business currently obtained by the 
      Company from sole or limited sources. More information on potential 
      factors that could affect the Company's financial results is included 
      from time to time in the Company's public reports filed with the SEC.
    
  
Teleconnect, Inc. (OTCBB:TLCO) announced today that it has signed
a Letter of Intent to purchase a majority stake in Star Mobile
Solutions SL (SMS); a Spanish mobile phone repair company. Though the
terms of the agreement have not yet been released, the acquisition,
which is expected to be executed before the end of December 2006, will
immediately double Teleconnect's turnover and bring a positive Net
Income contribution to the Company's consolidated financials.

   Teleconnect Inc. President, Gustavo Gomez explains, "We have
identified SMS as an attractive potential acquisition due to its
complementary nature to our expansion strategy and its bottom-line
profitability. SMS will allow Teleconnect to start offering
value-added services to mobile phone users in line with our business
plan. Expanding to other markets will be more attractive if we include
in our portfolio mobile prepaid services in addition to our fixed-line
prepaid service offering."

   About Star Mobile Solutions SL:

   Star Mobile Solutions SL is a privately held mobile phone repair
organization set up in 2002 in Madrid Spain. They have grown
exponentially in the market, becoming number 5 of 14 similar
companies. SMS has experienced 90% annual growth since inception
reaching an estimated 7,8M EUR turnover by the end of 2006. Today, SMS
has over 100 people on staff and 4 locations and require investment to
keep up with customer demands for additional service. They plan to
again double turnover and profit within the next 2 years.

   About Teleconnect:

   Teleconnect Inc. through its wholly-owned subsidiary Teleconnect
Comunicaciones S.A., a Spanish telecommunications company, is a major
player in the prepaid telecoms industry in Spain. Teleconnect Inc. is
traded on a U.S. stock exchange, the Over The Counter Bulletin Board
(OTCBB) with trading symbol TLCO. Teleconnect provides commercial and
residential users in Spain with a very competitive array of prepaid
services. www.teleconnect.es

   Forward Looking Statements:

   Except for the historical information contained herein, the
statements in this press release are forward-looking statements that
involve risks and uncertainties. Potential risks and uncertainties
include, without limitation, continued competitive pressures in the
marketplace; the effect competitive and economic factors and the
Company's reaction to them may have on consumer and business buying
decisions with respect to the Company's products; the ability of the
Company to make timely delivery of new products and successful
technological innovations to the marketplace; the continued
availability of certain components and services essential to the
Company's business currently obtained by the Company from sole or
limited sources. More information on potential factors that could
affect the Company's financial results is included from time to time
in the Company's public reports filed with the SEC.