Teleconnect Increases Distribution Points in Spain

MADRID, Spain, March 3, 2005 - Teleconnect Inc. (OTCBB: TLCO) announces increase in points of distribution as a result of the introduction of its new rechargeable prepaid calling card.

Teleconnect Inc., recently completed the testing of its rechargeable prepaid calling card named Fortune Rechargable and received the first order from its largest account. This main distributor started distribution of the rechargeable card in their own flagship stores last week. The coming weeks all their own 350 stores will be selling the rechargeable card. Once all their own stores are selling the rechargeable card, the number of points of distribution through this main distributor, which is managing and maintaining telecom infrastructure from several national retail chains in Spain amongst which also Correos, the Spanish post offices, will be increased up to 9.000 and will include distribution in Portugal. Our other large accounts already confirmed us that they also want to start selling the rechargeable card. For the rechargeable card we estimate additional recurring revenues of minimum EUR 2.000.000 for the year 2005. As such Teleconnect Inc subsidiary, Teleconnect Comunicaciones S.A., has begun its international expansion into neighbouring countries.

Teleconnect Executive Vice-President, Herman de Haas explained, "We are very confident that our new products, such as the rechargeable card, will help to increase our sales given the acceptance we are seeing in the market and the additional points of distribution which are being established as a result. This increase of distribution points is in line with our 2005 focus of increasing recurring revenues through the launch of new services which contribute directly to the bottom line. Our objective is a healthy, profitable return on rapidly growing operations to increase shareholder value."

About Teleconnect:

Teleconnect Inc. through its wholly owned subsidiary Teleconnect Comunicaciones S.A., a Spanish telecommunications company, is a major player in the prepaid telecoms industry in Spain. Teleconnect Inc. is traded on a U.S. stock exchange, the Over The Counter Bulletin Board (OTCBB) with trading symbol TLCO. ITS Networks provides commercial and residential users in Spain with a very competitive array of prepaid services. www.teleconnect.es

Forward Looking Statements:

Except for the historical information contained herein, the statements in this press release are forward-looking statements that involve risks and uncertainties. Potential risks and uncertainties include, without limitation, continued competitive pressures in the marketplace; the effect competitive and economic factors and the Company's reaction to them may have on consumer and business buying decisions with respect to the Company's products; the ability of the Company to make timely delivery of new products and successful technological innovations to the marketplace; the continued availability of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources. More information on potential factors that could affect the Company's financial results is included from time to time in the Company's public reports filed with the SEC

Source: ITS Networks

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