Before changing its name to Teleconnect Inc. in February 2005, ITS Networks was the holding company for ITS Europe and Teleconnect Comunicaciones S.A.

· ITS Europe was initially established in 1995 with the mission of offering long distance voice service to its clients; foreign residents on the south coast of Spain. It soon developed other services such as indirect fixed lines, calling cards or intelligent numbers (906/902, etc). In 1999, ITS Europe went public, through a reverse merger with ITS Networks. ITS quoted on the Nasdaq Bulletin Board with ticker ITST until the recent name change to Teleconnect Inc and now quoates as TLCO.

· In early 2000, ITS undertook an aggressive expansion of the business opening up 5 offices over the country of Spain and growing staff 3 fold. Due to the economic conditions in early 2001, the business was reduced to the one original office in Marbella and staff reduced.

· In March, 2002, ITS brought on board its current CEO and a new management team, with the challenge of leading ITS on its transformation path. As a first task, the new CEO and his team implemented the key measures to ensure the turn-around of the existing operations of ITS. As a result, ITS Networks embarked upon a challenging restructuring program to seize and consolidate a leadership position in very attractive segments of the Spanish telecommunications market.

· As part of this initiative, in November 2002, ITS Networks took over Teleconnect Comunicaciones S.A. in Spain; a prepaid card player since 1999. This initiative quickly took the company to revenue levels of 8M euro per year and also graced the Company with its own infrastructure and assets.

· Since this time, Management has continued to restructure the Companies, taking advantage of their synergies, bringing the headcount down from 68 to 32, redesigned the operations resulting in savings of over 100,000 euros per month, reduced the debt in Teleconnect and stabilized it in the local market. Today Teleconnect is ready to take off from a solid foundation of good products, efficient operations, excellent people, recognized brand, and newly developed services.

· Now, with the lessons learned from its history, from the rise and fall of so many other operators, and by leveraging its existing customer base and operations, ITS is poised to take advantage of the opportunities arising in the Spanish telecoms market through a new strategy to benefit from three promising sources of revenue:

• Addressing one the largest, fastest growing, and most underserved market niches: the diverse groups of non-Spanish consumers of telecommunications that are present in Spain (over 60 million foreign tourists each year, around 2-3 million foreigners residing now in Spain, thousands of businesses in Spain owned by foreigners, etc.).
• Serving Spanish SMEs that are intensive in international telecommunications traffic.
• Bet on new services developed internally and now ready for launch which will help ensure reaching the projected revenue levels.