Trading Update

Trading Statement

March 29, 2007 – Citel, The VoIP Migration Company™ (LSE AIM: CITE.L), announces a trading update around its financial year end on 31 March 2007.

For the 12 months to 31 March 2007, revenues are expected to be US$4.4 million and are in line with expectations.

Citel's business model is based on signing supply agreements with telecommunication carriers and internet service providers, enabling them to offer Citel's Portico™ Telephone VoIP Adapter (TVA™) ("Portico TVA" - formerly called "Handset Gateway") as part of their VoIP solutions. In addition, Citel sells directly to large/medium size enterprises.

During the financial year, Citel secured supply agreements with two major Tier I carriers. While these contract wins have served to underline the market potential of Citel's Portico TVA product within the large carrier space and the pipeline of opportunities with Tier I carriers has grown, it remains difficult to predict the timing of Tier I carriers' roll-outs of Portico TVA to the end-customer. With low visibility on these major opportunities, Citel now considers it unlikely that the Company will achieve market forecasts for the year ending 31 March 2008.

As a result, and in response to demand, the Company has expanded its focus on smaller carriers and internet service providers, and expects to make substantial progress in this market segment throughout 2007. During the last year Citel won a number of contracts among smaller carriers and internet service providers including OneStream, PennTel, Universal Connectivity, and others.

Also Citel is increasingly selling directly to large/medium sized enterprises. Direct customer relationships with these enterprise clients enables Citel to drive more immediate revenues than through the longer sales cycles of the indirect channels and with better end customer visibility. Importantly this also enables Citel to demonstrate (to the carriers) the market potential and commercial benefits of the Portico TVA product operating within large enterprises.

Citel expects at 31 March 2007, to have cash balances of US$8.5m which will support the current business plan through to profitability. Citel looks forward to further updating the market at the time of the preliminary results for the year ended 31 March 2007, in June 2007.

Commenting on the announcement, Mike Robinson CEO, said, "The migration to VoIP in the business market is happening. Our aggressive expansion of our sales force is driving the business forward and improving the recognition in the market of the commercial advantages of Citel's solutions. There continues to be no significant competitor to Citel's solution for VoIP migration, and despite slower than expected Tier 1 expansion, we remain confident in the strength of Citel's market position."

About Citel plc

Citel enables SMBs, large enterprises and service providers to realize the cost and productivity benefits of IP telephony while at the same time leveraging their existing PBX infrastructure. Businesses with single or distributed locations and PBX vendors can now deploy next-generation IP applications and services at their own pace, with little business disruption. Service providers can deploy hosted IP telephony services quickly, without having to rip-and-replace existing enterprise PBX handsets and LAN cabling. Citel is a publicly traded company with corporate headquarters in Seattle, and development offices in Calgary, Alberta (Canada) and Nottingham, England (UK). For more information, visit www.citel.com.

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The contents of this Press Release may contain forward-looking statements which can be generally identified as such because the context of the statement will include the words such as Citel plc "expects", "should", "believes", "anticipates" or words of similar import. Such forward looking statements are subject to certain risks and uncertainties including the financial performance of Citel plc which could cause actual results, performance or achievements of Citel plc to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

This Press Release does not constitute or form any part of any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for any securities in any jurisdiction, nor shall it (or any part of it) or the fact of its distribution form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment therefore.

Copyright 2007, Citel plc. All Rights Reserved.

Citel and The VoIP Migration Company are trademarks of Citel Technologies, Inc. All other product and company names mentioned herein may be trademarks of their respective owners.