Press Release
MADRID, Spain--(BUSINESS WIRE)--Dec. 14, 2005--Teleconnect Inc (OTCBB:TLCO - News) has reached a new distribution agreement with the Grupo VIPS restaurant chain to significantly expand the distribution of its rechargeable calling card to all Grupo VIPS locations. ADVERTISEMENT

Over the last two years, Teleconnect has sold its traditional pin-based prepaid calling card through most of the VIPS locations in Spain though focused in Madrid. Now this agreement has been extended to include Teleconnect´s new and highly successful rechargeable prepaid calling card and the rest of the Grupo VIPS locations.
The advantages for VIPS restaurants are that it can open up more points of sale for the product by just modifying the cash terminal at the stores instead of having to increase card inventory, it has no need for investing in additional card inventory therefore less reliance on shipping time and finally it can offer more flexibility of products by permitting recharges of multiples of 5 euros to 150 euros.

The advantages for Teleconnect are that it strengthens its already firm foothold inside of major accounts such as VIPS, it can rapidly expand to more distribution points through VIPS chains of stores and affiliated companies (such as Starbucks), and finally it can further improve production costs by significantly reducing the need to produce plastic for its prepaid cards.

Teleconnect Inc. President, Gustavo Gomez explains, "By selling our rechargeable product predominantly through our most solid channels; as well as expanding throughout our current network, we are constantly improving our product margins by reducing our production and distribution costs. Our corporate objective is to further build shareholder value by expanding our operations and continuously improving profitability with rapidly growing operations."

About VIPS:

Grupo VIPS is a leader in the restaurant and retail industries in Spain. It has 295 establishments in 15 major cities in Spain and France. Its commercial offer is made up of five different chains; VIPS, Ginos, Tio Pepe, the Wok, and TGI Friday´s. In 2005, Grupo VIPS will have revenues of 350 million euros from its 120,000 daily customers. It has 1,2 million members of its fidelity program "Club VIPS" and over 7000 people on staff. Grupo VIPS is a joint venture company with Starbucks Coffee International. www.grupovips.com

About Teleconnect Inc:

Teleconnect Inc., 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:TLCO - News). Teleconnect 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.


Contact:
LC Group
Rick Lutz, +1 404-261-1196
lcgroup@mindspring.com