Frost & Sullivan Forecasts Portico to Accelerate Hosted IP Growth Opportunity

Alternatives Such as Citel Portico Provide 71 Percent CapEx Savings; Slated to Grow Market by 60 Percent

SEATTLE - May 15, 2007 - New Frost & Sullivan research evaluates the cost of a Hosted IP telephony rip-and-replace solution compared to the cost of a Hosted IP service utilizing the Citel Portico™ Telephone VoIP Adapter (TVA™). The research finds that the Portico TVA provides enterprises with a capital expenditure savings of nearly $300 (U.S.) per endpoint, a 71 percent savings on a per-user basis. Frost & Sullivan forecasts the potential impact of alternative solutions such as Citel Portico to increase the number of Hosted IP telephony seats in North America nearly 60 percent by 2012.

“Portico gives service providers a tremendous opportunity to grow their Hosted IP service by offering a solution that leverages the customer’s existing telephone infrastructure,” said Lynda Starr, senior analyst, IP communications, Frost & Sullivan. “Citel effectively addresses many of the key barriers around cost and business disruption that many enterprises express when considering a Hosted IP service.”

In a new whitepaper titled “Accelerating Adoption to Hosted IP Telephony,” commissioned by Citel, the VoIP Migration Company™ (LSE AIM: CITE.L), Frost & Sullivan summarizes the differential between the upfront costs of a rip-and-replace hosted IP telephony strategy and the Citel Portico TVA solution for a 50-employee enterprise.

Cost Item / Strategy	Hosted IPT “Rip and Replace”	Portico TVA and SIP Trunking
Cost per Station for LAN Assessment	$70.00	$0.00
Cost per IP Station	$200.00	$0.00
LAN Switch Port (including Power over Ethernet)	$80.00	$0.00
Cost per Portico TVAStation for Citel	$0.00	$100.00
Installation Cost per Station	$52.50	$15.00
End-User Training Cost	$15.00	$5.00
Total Upfront Cost of Solution	$417.50	$120.00

The data suggests a company with 50 employees could save nearly $15,000 (U.S.) in upfront costs by selecting the Citel Portico TVA solution over a rip-and-replace alternative.  The cost savings, achieved through utilization of an enterprise’s existing infrastructure, enable service providers to more quickly and easily sell a Hosted IP service.

“Service providers to date have captured limited market penetration in North America,” said Michael Burke, senior vice president of sales and marketing at Citel. “We’re very pleased with this validation of the cost savings that can be achieved with Portico. These savings translate into an incredible opportunity for service providers to grow their Hosted IP business.”

Based on a probabilistic behavioral model to forecast the potential impact of solutions such as Citel Portico on the Hosted IP telephony market, Frost & Sullivan predicts the following low, medium and high estimates of 42.4 percent, 55.5 percent, and 60.0 percent respectively for the growth of Hosted IP telephony seats in North America.

About Citel Portico TVA

Citel Portico TVA enables service providers to deliver to enterprises the features and functionality of VoIP faster and more easily than with typical rip-and-replace VoIP migration solutions. With Portico, enterprises avoid the cost of network upgrades, new handsets, and retraining. PBX handsets connect directly to the Portico TVA over existing wiring, which connects to the service provider’s network over Ethernet via the SIP protocol. Portico TVA interoperates with leading Hosted IP server platforms  including BroadSoft and Sylantro. Portico TVA also interoperates with leading IP PBX platforms such as Asterisk, Avaya and Pingtel. In addition, Portico TVA interoperates with more than 100 handset types including Avaya Definity, Ericsson, NEC, Nortel, Panasonic DBS, and Toshiba Strata DK.

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. 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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