CITE Ls 2x Citi

RNS Number:8352F
Citel PLC
17 October 2007


                                   Citel plc
                           ("Citel or the "Company")

                                 Trading Update

Citel, which designs, develops and markets a range of Voice over Internet
Protocol (VoIP) solutions for the business telephony market, today reports on
trading for the six months ended 30 September 2007.

For the six months ended 30 September 2007, revenues are expected to be US $2.64
million, an increase of 23% from US $2.15 million for the six months to 30
September 2006. During the first six months of the fiscal year the Company has
executed its revised strategy to focus on end users and Tier 2/3 carriers.
During the period Citel expanded its portfolio of Tier 2/3 carriers, signing
deals with leading carriers in the Caribbean and Central America. In addition,
good progress was made on direct end user sales, including a major contract win
with a large US university. Management believes that the education market
represents significant potential for Citel's VoIP migration solution and the
Company is currently in discussions with a number of major colleges and
universities in the US. Sales of the key TVA product have shown strong growth
and now represent approximately a quarter of total turnover.

However, while progress has been very encouraging and shipment levels of TVA
continue to expand, it remains difficult to predict the timing of the benefits
of the Company's direct and leveraged selling efforts. Consequently, Citel now
considers it unlikely that it will achieve market forecasts for the year ending
31 March, 2008. In light of the revised outlook, the Company is in the process
of realigning its cost base. The Company has reduced staffing levels by 30%
across all functional groups and is consolidating office numbers from three to
two. As at 30 September, Citel had cash of US$2.3m which, together with credit
facilities and reduced cost levels, should support the current business plan
through to profitability.

Going forward the Company will continue its strategic focus on Tier 2/3 carriers
and direct selling, where it believes more immediate revenues can be derived in
a shorter time frame. Management retains its belief in the potential of the Tier
1 carrier market and will continue to apply appropriate levels of resource to
ensuring Citel is well placed to benefit from any pick up in demand from this
channel.

Citel looks forward to further updating the market at the time of publishing the
results for the six months ended 30 September, 2007 in December 2007.

Commenting on the announcement, Jose David, Interim CEO, said, "Our strategy to
focus on direct selling and Tier 2/3 carriers is driving more immediate revenues
and progress has been encouraging. The market for VoIP migration remains large
and we continue to be the only provider of this migratory VoIP solution. Our
pipeline of opportunities continues to grow and we believe our aggressive sales
strategy will drive the business forward. We remain confident in the strength of
Citel's market position."

About Citel plc

Citel enables SMBs and large enterprises 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 by installing Citel's TVA Portico
products. Service providers can deploy hosted IP telephony services, without
having the client rip-and-replace existing PBX handsets and LAN cabling.
End-user training is also eliminated for the desktop client. Citel is a publicly
traded company with corporate headquarters in Seattle, with R&D/ Product
Development staff in Nottingham, England (UK). For more information, visit
www.citel.com.

________________________________________________________________________________


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.

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.


Enquiries:


Citel                   Jose David                             001 206 965 8925

Panmure Gordon          Dominic Morley                      +44 (0)20 7459 3600
                        Giles Stewart
                        Andrew Collins

Cardew                  Tim Robertson                       +44 (0)20 7930 0777
                        Shan Shan Willenbrock
                        David Roach



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

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