Vocalis Group PLC - Re Contracts

RNS Number:6452I
Vocalis Group PLC
6 April 2000


Business Update

Vocalis Group plc ("Vocalis"), the international speech technology group,
announces today that is has secured a number of contracts for its internet
related and traditional products.  Whilst the revenues from the internet
related contracts are significant, the Company has taken a strategic decision
to recognise a large proportion of these revenues over the term of the
contracts, which span the next 3 years.  

Over time this will serve to even out what has traditionally been a lumpy
revenue stream due to the size and nature of contracts for its SpeechTel
products.  In addition, this business model will make Vocalis' internet
related products more accessible and affordable to a broader potential
customer base.

The Company has previously stated that the year 2000 would be a year of
investment with the benefits showing in 2001 and the years beyond. As a
result, the Company's expected loss for the year ended 31st March 2000 will be
materially greater than current expectations.

New Contracts

Specifically, Vocalis is delighted to announce the following:

The agreement of an exclusive three year deal with MCI Worldcom in the UK for
the provision of telephony services for SpeecHTML and SpeechMail.  This
significantly enhances the revenue potential of SpeecHTML and SpeechMail.  MCI
Worldcom has also agreed to purchase exclusive supply rights under license,
based on the successful growth of SpeecHTML and SpeechMail.

Vocalis Inc. has signed an exclusive contract with Zebec Data Systems Inc. of
Houston for the provision of SpeecHTML to the US Healthcare market.  The
initial license value is US$1.5 million and will be recognised over the next
three years.  In addition Vocalis Inc. will continue to share in the gross
revenues derived from the on-going use of SpeecHTML in the US Healthcare
market.  The Company is pursuing opportunities for SpeecHTML in other niche
sectors of the US market.

Negotiations are in progress with potential partners to provide SpeechMail as
a managed service in the US.  Shared Network Services (SNS) is the first
example of a US SpeechMail partnership in which SNS will offer SpeechMail to
their customers nationwide for a monthly fee to be shared between Vocalis and
SNS.  Based in Lodi California, SNS is a fast growing provider of
build-your-own website tools and services to businesses with an estimated
150,000 customers.

Embratel, the Brazilian arm of MCI Worldcom, has installed SpeechTel for the
advanced handling of collect calls in their domestic and international
markets.  This contract has an initial value of #650,000 and the system was
delivered, tested and accepted in March.

Product development

The Company's new products: SpeechMail, SpeecHTML and SpeechWare have been
launched and sales have begun.  

SpeechMail has been adopted by over 70 Internet Service Providers including
many of the leading names in the UK and Vocalis is marketing SpeechMail into
the US and other Countries.  Sign up of users of SpeechMail in the UK has
risen rapidly during the last three months of the financial year.

SpeecHTML is poised for launch in the USA later this month and has already
generated a great deal of interest in the US Healthcare industry following
Vocalis' participation at their recent annual conference.  This opportunity is
particularly exciting and on 31st March the Company signed an exclusive
licensing and revenue share contract with Zebec Data Systems Inc., a leading
data warehousing company in the US Healthcare sector.  

Development of the full software version of SpeechWare was completed in March
2000 and is being actively marketed to over 30 customers. A global
distribution channel is being put in place with partners including Dialogic
and Natural Microsystems.  The hardware version of SpeechWare has taken longer
than planned but is now in the final stages of testing and is expected to come
to market in the early summer.  The Company believes that this will provide a
unique opportunity in the Speech Recognition Telephony market because of the
power and flexibility offered by the solution and a number of customers are
awaiting its initial release.

As previously indicated to the market the SpeechTel business model has been
revised during the last nine months with a new sales and distribution
strategy, including both global and regional partnerships, being put in place.
Whilst this has exacerbated the lumpy nature of the SpeechTel business in the
short-term, the new business model has been implemented to create a more
predictable and even revenue stream in the future.  Interest in the Company's
SpeechTel platform and solutions has never been higher and Vocalis enters the
new financial year with a strong prospect list from five Continents. 

Outlook

During the period, the Company has made a substantial investment in new staff,
capital equipment and marketing, and brought new products to market during the
final quarter of the financial year.  The Sales teams have been restructured
under Peter Hauser, who joined the Company last summer as Sales Director. 

The Directors believe that the strategy to maximise future revenues generated
by its internet related products by retaining the rights to on-going license
based revenue streams is fundamental to the future long-term growth of the
Company.  It will increase visibility going forward and assist in the securing
of future business along similar lines to that announced today.

These business wins are evidence of the Company's ability to succeed in this
market and the effectiveness of this strategy.  In conjunction with a record
number of opportunities in the pipeline, the Directors view the future with
confidence.

For further information:       
Charles Halle
Vocalis Group plc
Tel: [phone]
[e-mail]       Tom Moriarty/Victoria Springett
ICIS
Tel: [phone]
[e-mail]


About Vocalis

Vocalis Group plc, as a leading speech technology Group, builds a range of
voice activated telephony products for customer around the world. Vocalis was
formed in 1993 and has been trading on the London Stock Exchange since July
1996. 

The Vocalis technologies areas include:-

SpeechWare, Vocalis' proprietary third generation advanced speech recognition
technology, which is available to purchase under license. This is fully
supported with toolkits and is available in most of the languages across the
globe.  The Website is http://www.vocalisspeechware.com 

Vocalis' Internet Product range allows access to information on the Internet
by simply picking up the telephone and hearing the information. SpeecHTML
allows companies to offer a telephone number which people can call to access
the information on the Website, which they can then interact with using spoken
commands. SpeechMail enables people to call and access their e-mail messages;
they can hear them, reply and delete them using simple spoken commands.  The
Websites are http://www.speechtml.com and http://www.vocalisspeechmail.com

SPEECHtel is a platform with voice activated service applications for fixed
and mobile telephone operators around the world. These include both operator
services and value added services, such as directory assistance, unified
messaging and voice dialling.
The Website is http://www.speechtel.com 

The Vocalis Website is at http://www.vocalis.com.



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