RNS Number:3123K
Project Telecom PLC
24 April 2003


                                 PRESS RELEASE


Project Telecom - trading update


THURSDAY, 24 April 2003 - As a result of increasingly difficult trading
conditions, Project Telecom plc, the UK's leading virtual network operator
focused on the business market, has experienced slower growth than expected
during the first quarter of 2003.


Since the beginning of the year, the economic environment has become
increasingly challenging for businesses in general and the telecommunications
industry in particular. The fixed line market continues to suffer the effects of
a significant supply and demand imbalance whilst the mobile market is shifting
its business model from customer acquisition to retention.


During the first quarter of 2003, intense price competition in the business
market from certain mobile network operators has resulted in higher levels of
churn, lower than anticipated growth in our customer base and a reduction in
average revenues per customer.


In addition, following the Competition Commission's decision to reduce
termination charges by the mobile network operators, connection commissions paid
by the network operators have been cut significantly - in some cases by more
than #50 per customer. The company anticipates that the mobile network operators
may seek to implement further reductions in commissions later in the year.


In the light of current market conditions, the Board has lowered growth
expectations for the current year and now believes that profits from continuing
operations will be broadly in line with those in 2002. Management has responded
decisively to this tough trading environment and is highly focused on reducing
costs and maximising cashflow whilst growing market share.


Project Telecom remains a strong, well managed, profitable and cash generative
company. It is continuing to invest significantly in its ability to manage an
expanding customer base and management will take all actions necessary to ensure
that the company continues to grow rapidly, to take advantage of opportunities
to further develop the business and to deliver an expanding range of products
and services.


ENDS


For further information contact

Simon Bloomfield

Partner, Bankside Consultants

Tel: 020 7444 4140








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