.

what now?


Envesta Telecom PLC
20 September 2005


Embargoed until 0900, 20 September 2005


Envesta Telecom plc
('Envesta', 'the Company' or 'the Group')

TRADING UPDATE

In advance of the formal statement on the preliminary results for the financial
year to 30 June 2005, the Board of Envesta Telecom Plc would like to update the
market on current performance and outline changes to core strategy which stem
from current market conditions.

Strategy
In an acceleration of the strategy originally set out in March 2005, driven by
the recent market sector moves such as ebay's purchase of Skype (the VoIP
retailer) and recent trading in our core managed wholesale business; the Company
will be moving away from its concentration on the wholesale voice business into
retail, focusing on the new era of Voice over Internet Protocol and IP.

Over the last few months the Board has been in detailed discussions with a
number of significant acquisition targets that have the requisite attributes to
contribute to Envesta's focus on Retail Voice and IP Data delivery. Upon the
successful completion of these acquisitions, the new operating companies will
work together as part of the Envesta Group, moving towards using VoIP as the
chosen platform for delivering voice to end-user customers. The presentation of
Envesta's strategy to these companies has been warmly received along with
institutional interest in investing in the acquisitions.

As part of this strategy and given the continued volatility within Seven
Telecom's managed wholesale calling card business, the Board has decided to
divest the Seven Telecom operation in order to focus on its acquisition strategy
to move into the more stable retail voice and IP space.

Current Trading Update
The competitive market position in the managed wholesale part of the Seven
Telecom business has dramatically changed, with the current market leader
growing from 8% to 60% of the 495 million pre-paid card market (Source: Schema
Market Analysis 2005) in less than 6 months (Jan 05 - Jun 05). This has been
achieved by extremely aggressive pricing and cash collection.

During the second half of the last financial period, (January to June 2005), our
sales were not adversely affected, however the cash collection cycle slowed
considerably in the last quarter. The Company's actions to secure cash
collection have however adversely impacted revenues in Q1 of the 2006 financial
year and we expect this to continue. In this competitive environment where such
major changes in market share have occurred, the Board's opinion is that the
only sustainable long term protection mechanism would be to introduce a
direct interface with the end user pre-paid retail customer, hence ensuring that
cash collection is direct and greater margin is secured. Creating this
interface is not consistent with Envesta's strategy and as such the Board
believe that Seven Telecom should be divested to an acquirer who has this
capability. In preparing Seven Telecom for divestment operating costs are being
adjusted to a level consistent with the reduced revenues.

Equity Raising
In the announcement dated 28 July 2005 we outlined the need to raise working
capital for the current business. This process was put on hold while we
investigated interest in the Seven Telecom business. With the decision now to
divest Seven Telecom as part of the acceleration of our strategy, raising the
working capital is now underway.

In addition to the working capital required for the existing business the Group
will require investment capital for our future acquisition strategy. We expect
the capital raising(s) specifically for each major acquisition to take place
over the next 12 months. The Board anticipates that such acquisitions would be
financed by a combination of the issue of vendor shares and equity cash placing.

- Ends -

For further information please contact:

Clemmie Carr
Tavistock Communications
Tel: 020 7920 3150

ccarr@tavistock.co.uk

Tracy Ronan, Communications and PR Manager
Envesta Telecom Plc
Tel: 01635 817434

tracy.ronan@envestatelecom.com

Kevin Jauncey, Executive Chairman
Kevin McGovern, Finance Director
Envesta Telecom Plc
Tel: 0870 767 7778

kevin.jauncey@envestatelecom.com

Kevin.mcgovern@envestatelecom.com

Notes to Editors

About Envesta Telecom Plc

Headquartered in London, Envesta Telecom Plc owns state of the art
infrastructure interconnected with worldwide Tier One carriers such as BT and
T-Systems. Significant capital investment in Voice over Internet Protocol,
('VoIP') technology, has expanded Envesta's technical capabilities, opening up
new routes to Africa and Asia at greater margins to the Company. This, along
with some of the most sophisticated monitoring capability in the industry, means
that Seven Telecom is able to closely monitor and control the business to
achieve maximum efficiency and effectiveness.



This information is provided by RNS
The company news service from the London Stock Exchange

Too much in it to say on a first couple of reads there will be a big over reaction and then time to add more.

A new Evesta Group with the move into retail accelerated and funded by the disposal of the wholesale side in Seven Telecom and insitutional support. Seven Telecom itself should raise a good sum. Accelerated move into retail and VOIP which was clear from the past statements and cuts out the drag on cash from the previous wholesale side.

The plans they say have been warmly viewed and have Institutional interest. We wonder whether those Institutions are picking up cheap shares as the small investors limit the damage to their holdings.

We have decided to stay put - it may be a year or so to see growth providing they are in time to play catch up.
Agreed with 2LB's comments on ADVFN.

Remember DYOR

Ageed annbar and staying put for sure.

PAPAL

Have just topped up.,
Am shocked at the news

Hi All,

I topped up at 1.89p, as the news is seen as positive by the trade, and negative by P.I's seeking a quick rise to 10p+, and this is showing in the trades, with several big buys, and lots of small sells, and buy volume now exceeding sell volume as we head back to 3p over the next week or two.

Cheers,
PM

I would have liked to see more figures.

I think the over-reaction is 2 fold:
1) People fear change.
2) Could be longer to wait to see the share price rise to new highs (but at the expense of making the company more stable).

I personally think that the company is being made more and more stable. For long term profitability (and even existence) this is a good thing. For those expecting 100% gains in a few weeks - don't think it will happen :-)

[I have grabbed a few though in the hope of making a fast buck on the bounce!]

Hi Paulmasterson

Massive sells coming through!

Sells almost now equal to the buys

Think that we will end the day at
1.10 pence,then i will buy some more

Loud shouts of "I told you so"

LOL

.

It is not all bad news and they have addressed a lot of issues and made clear their move to retail. All is not lost and there is some decent information in that statement too about the changes going on. I will remain in and see where it takes us.

It looks exactly like ALL bad news.

PP Hi,

Whats the status on L2 ?

I tried buying more on Iweb, and they don't have any stock to sell me !!

Am I right in saying that the P.I's are being shaken out, because Institutions have put in big orders at low prices ????

Cheers,
PM

Hi Paul it might look like the deramping was done with leaked information. Was it done to get people to sell out on fear and panic because of the deramping ahead of the leaked news ?

It could well be someone taking in all the stock now, have not got L2 up at the moment.

PAPAL what do you mean?re your last post

This for me is a TOTAL disaster papal

do the management have any credibility anymore ?? if not it hasnt a chance of raising the money KJ has decent track record at Gamma so hes no fool looks like going to have to hold them with my average price at 4.4p but it is a disaster

More EVS for me at 1.5p .

779111 Buy EVS.L LSE ENVESTA ORD 1P GBP 20/09/2005 14:46 0.01500 275000 1.0000 4125.00
779105 Buy EVS.L LSE ENVESTA ORD 1P GBP 20/09/2005 14:44 0.01500 204775 1.0000 3071.62

Now holding a few million after a nice average down today, once they sell Seven, we will see how much cash they raise for it, and judge whether they need more cash now, or later .... they did say it would be raised over the next 12 months .... not the next 12 days .... LOL !

Cheers,
PM

Paul,wish i had the COURAGE to average down!!!!!!!!!!!!!!!!!!!!,even more

Have had sewaty palms all day,maybee this game is not for me