Joint Venture

RNS Number:7753G
Elitel Telecom S.p.A.
26 July 2006


For Immediate Release                                               26 July 2006


                              Elitel Telecom S.p.A.

                                 Joint Venture

Elitel Telecom S.p.A. ("Elitel") (AIM: ETM), the independent Italian
telecommunications group, has today signed a Joint  Venture agreement with C-
Factory, a leading Italian mobile content provider.

Through All Media S.r.l. ("All Media"), a newly formed joint venture company,
Elitel and C-Factory will offer mobile  users a web-based information and
entertainment service platform based on a range of proprietary multimedia
content.   Elitel has invested Euro6,600 into the joint venture and as a result
owns 55% of All Media while C-Factory owns the  remaining 45%.

Content will be delivered through a new web portal www.zaap.it, offering a range
of proprietary content including  mini-cartoons, video ringtones, screen savers
and sound effects, via the web and to the customer's mobile.  Elitel will 
provide connectivity via premium rate telephone numbers and will also manage
billing services, while C-Factory will  undertake content creation and will be
responsible for promotion and marketing  of the project.

The Italian mobile market is one of the fastest growing in Western Europe which,
according to World Telecommunication  Indicators/ITU 2005, saw an annual
compound growth rate between 2000-2005 of 11.4%.  Italy also boasts some of the 
highest mobile phone penetration rates in Western Europe and this had led to
significant growth in the e-content market  in Italy among the 71.35 million
mobile subscribers (which represents 123.14 subscribers per 100 inhabitants)
ITMedia  Consulting estimate that the Italian mobile market will be worth Euro60
million at the end of 2006 and the Directors  believe that demand for web based
download services is an exciting growth area within the mobile arena.
Commenting on the creation of the joint venture, Federico d'Este, Chief
Executive of Elitel, said:


"This is an exciting venture for Elitel and we are pleased to have partnered
with C-Factory who have a strong record in the creation of web and mobile
content. We believe that this joint venture will enhance further our Value Added
Services business directly through greater traffic to our premium number
services. This is part of the continuing development of Elitel's premium rate
services and we anticipate that All Media will make a contribution to revenues,
and an enhancement to group margins from next year."

Enquiries

Elitel Telecom S.p.A                                             [phone]
Federico d'Este (Chief Executive)
Nicolo Zanchi (Group Corporate Development Officer and Investor Relation)

Buchanan Communications                                      [phone]
Jeremy Garcia

Charles Stanley Securities                                   [phone]
Russell Cook/Freddy Crossley

Notes to Editors

Elitel is an independent Italian fixed line telecommunications group. It
provides a broad range of voice, data and  broadband services, including Voice-
Over IP ('VoIP'), to both businesses and residential customers. The Group also 
provides wholesale telecommunications services to other carriers, international
call services specifically for the  Italian ethnic market and telecommunications
services to premium content providers. Elitel's network, which covers the  whole
of Italy, is based on interconnection agreements and access through the leasing
of lines from carriers including  Telecom Italia and other international
carriers.

C-Factory is a leading Italian mobile content provider. The company was founded
in October 1998 with the original goal  to launch the Internet site DCOD.IT
("decode your music"), at the time the first internet site for webcasting and 
streaming dedicated to music in Italy.  In July 2000, C-Factory entered into the
mobile content sector implementing the  "BLU Dedica" initiative for the mobile
operator BLU SpA. The service offered music on a pay-per-listen basis, achieving
over 1,600,000 contacts per year. The service was then replicated by Tim,
Vodafone and Wind.

C-Factory has since worked with Wind on a number of projects, entering a
framework agreement in February 2005 to  provide Wind with content (from SMS to
video) on all its fixed and mobile platforms. In July 2005 - C-Factory is 
awarded with the prestigious "e-Content Award 2005" of the Fondazione
Politecnico di Milano and the World Summit On The  Information Society.



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