Phonetime plans expansion by acquiring Huntington Telecom



    - Strengthens its position as a "Carrier's Carrier" to Latin America -

    MISSISSAUGA, ON, Jan. 7 /CNW/ - Phonetime Inc. (TSX: PHD), one of the
world's fastest growing providers of international long-distance
telecommunication services, announced today it has signed a binding Letter of
Intent to acquire Huntington Telecom, a privately-held wholesaler of
international long-distance minutes based in New York. The purchase price will
consist of cash and common shares of Phonetime, and includes a three-year earn
out formula based on specific revenue criteria and gross profit performance.
    "Acquiring Huntington Telecom further solidifies Phonetime's position as
the 'Carrier's Carrier' and is strategic on a number of levels," said Wayne
Silver, President and CEO of Phonetime Inc. "It will provide us direct
licensed wholesale routes that complement our existing network in Latin
America as well as North Africa. It is immediately accretive to our revenue
and cash flow and we plan to finance this acquisition from our own internal
resources and organic cash flow. We also believe that Phonetime's proprietary
software and systems will help us unlock additional margins and profit from
Huntington's routes and customer base."
    Mr. Silver further added, "The acquisition of Huntington is consistent
with Phonetime's corporate strategy to expand its financial and human
resources so it can build additional direct capacity into high demand
countries. Following on Phonetime's acquisition in December 2007 of Symphony
Telecom, which provides Phonetime a strong regional wholesale presence in
Africa and the Far East, the Huntington acquisition brings us a strong
regional presence in Latin America and North Africa. We intend to continue
this strategic approach to acquire similar companies to add into the Phonetime
family. We believe that by adding and managing more long distance routes and
larger capacities, Phonetime develops into a more strategic and valuable
partner to incumbent carriers all over the world. Acquiring Huntington is
another step towards Phonetime's goal to become a $500 million company by
2011."
    Established in 1999, Huntington Telecom is a wholesale telecommunications
company that works with regional carriers in Latin America, Asia and Africa,
to develop international long-distance routes while ensuring call quality. In
2008, Huntington Telecom generated approximately $40 US million in revenues.
    The transaction is expected to close on or around March 31, 2009 and is
subject to customary documentation and closing conditions and regulatory
approvals.

    About Phonetime Inc.

    Established in 1994, Phonetime is a leading supplier of international
wholesale and retail long distance telecommunications services with network
facilities in Canada, the U.S., Europe, Africa and Asia. Through its Wholesale
Division, Phonetime buys and resells long-distance services to major telephone
carriers around the world using its proprietary call trading platform. Through
its Retail Division, Phonetime provides subscription-based long distance
services to targeted ethnic consumers across Canada and competitively markets
a range of pre-paid long distance phone cards. Phonetime's common shares trade
on the Toronto Stock Exchange under the symbol PHD. More information can be
found at the Company's website, www.phonetime.com

    Caution Regarding Forward Looking Information:

    This press release contains forward-looking statements, which may be
identified by words like "expects", "anticipates", "plans", "intends",
"indicates" or similar expressions. These statements are not a guarantee of
future performance and are inherently subject to risks and uncertainties.
Phonetime's actual results could differ materially from those currently
anticipated due to a number of factors set forth in reports and other
documents filed by the Company with Canadian securities regulatory authorities
from time to time.





For further information:

For further information: Contacts: Wayne Silver, Phonetime, President &
CEO, (905) 361-8304, wayne@phonetime.com; Rodney Franklin, Phonetime, Chairman
& CFO, (905) 361-8305, rodney@phonetime.com; Joe Racanelli, Equicom Group,
(416) 815-0700 x 243, jracanelli@equicomgroup.com

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