HSL Announce Entry into Mobile-to-Mobile SMS Market
to Compete with UK Mobile Network Operators

Edinburgh, Scotland, 26th April 2006

HSL (Hay Systems Ltd), a leading provider in the field of SMS telecommunication services, is today announcing that it is initiating requests for interconnect with the UK mobile network operators Vodafone, T-Mobile, O2 and Orange for the purpose of providing cheaper SMS to consumers and businesses.

The requests being made by HSL to Vodafone, T-Mobile, O2 and Orange are specifically for the purpose of SMS mobile origination and will once negotiated provide HSL with access to these mobile networks to allow HSL’s SMSCs to deliver SMS from subscribers of these networks. This access will enable HSL to provide UK mobile subscribers with an alternative provider for sending SMS messages from their mobiles at a cost which is expected to be cheaper than existing pricing from UK mobile network operators.

HSL is aiming to reduce the price of SMS to 3.1 pence over the next 2 years for SMS sent to UK mobiles. Based on figures from Ofcom, the UK’s telecommunications regulator, the current average price for an SMS is approximately 6 pence (1).

HSL expects to be able to reduce the cost of SMS by 2.9 pence over the next 2 years, and achieve a share of 25% of the mobile-to-mobile SMS market in the UK, a growing market in which a total of 8,183,000,000 SMS were sent by UK mobile users during Q3 of 2005 (2). By the introduction of HSL as an alternative provider for the sending of SMS from UK mobiles, consumers and businesses in the UK switching to HSL’s service are expected to benefit through cost savings in excess of £237 million per year.

Consumers and business users will in due course be able to elect to use HSL instead of their existing mobile network operator by using their mobile telephone. By specifying the Short Message Service Centre (SMSC) address of HSL’s SMSC, instead of their existing mobile network operator’s SMSC, a user subscribed to HSL’s service will be able to send SMS from their mobile telephone via HSL’s SMSCs to other mobiles.

HSL is seeking access to the networks of the UK mobile networks operators under UK legislation which is intended to allow consumers a choice of providers for the services that they use, and to encourage competition in the communications market.

It is HSL’s expectation that UK mobile network operators will resist the introduction of competing mobile-to-mobile SMS services from alternative providers. However, HSL is highly optimistic that it will be successful in securing access to the networks of the UK mobile networks in light of the UK regulatory framework which obliges mobile network operators to negotiate a request for interconnect such as that currently made by HSL.

HSL intends to market its services through its own brand, a new and separate brand for consumers and through existing MVNOs and other service providers.

1 See: Ofcom: Communications Market Quarterly Update, August 2005, page 48, figure 43
2 See: Ofcom: Telecommunications Market Data Tables Q3 2005, February 2006, page 17, table 3

ENDS

26th April 2006