In Q3, Telio added 13,000 customers in Norway while realizing very low cancellation rates.  Thus, as of the end of October, the Company has grown its customer base to 73,400 totals in Norway and Denmark.

 

Furthermore, in Q3 Telio focused on developing and introducing distribution channels that cost-effectively reach Telio's most attractive customer segments.  As a result, Smart Club was successfully introduced as a new channel early in Q4. 

 

The Company signed a second OEM agreement in Holland. In addition, an OEM was built for the Swedish market and the platform has successfully passed the acceptance tests conducted by our Swedish partner.

 

Telio continues to experience solid growth, despite the entrance of new operators to the market. Growth is fuelled by the attractiveness of the offerings, the quality of the customers' experiences and an increased awareness to the benefits of VoIP. 

 

 

Total revenues for the quarter were nok 48.2 million, a 13% increase over the previous quarter and a 400% increase over Q3 2004.  Year to date revenues were nok 125 millions.

 

Operating profit before taxes of nok 62,000 reflects certain one time items including nok 5.2 million relating to previous quarters (costs of goods sold).

 

Normalized operating results for the quarter were nok 5.8 million compared to nok 0.6 million in the previous quarter.

 

Recurring revenues grew to nok 40.6 million in Q3, an increase of 25% over Q2.  Recurring EBITDA grew to nok 5.7 million in Q3, an increase of 200% over Q2.  

 

The cash balance improved by nok 4.3 million during the quarter.

 

 

The company conducted a legal reorganization during the quarter.  Telio AS is becoming the holding company of the group, thus changing its name to Telio Holding AS. 

 

As of November 14, 2005, the Company had 181 shareholders, 28% of which list their address of record outside of Norway. 

 

On November 4, 2005 the Board of Directors approved an increase of the share capital by nok 500 to nok 179,575 as four employees converted a total of 50,000 options into shares with a nominal value of nok 0.01.

 

Total number of outstanding options, vested and unvested, is 2.6 million with an average strike price of nok 14.22.

 

Finally, during the board meeting of November 4, the Board of Directors granted authority for management to begin efforts to obtain a full listing of the Company during the first half of 2006.

 

 

In the fourth quarter the Company will continue to focus on growing existing distribution channels and developing new ones.  Increased customer intake and increased customer acquisition costs compared to Q3 is expected. Increased revenues and operating result from recurring operations compared to Q3 is expected.

 

 

Contacts;              Arild Nilsen, CEO,                                              +47 23626688

                               Kyrre Grinde-Andersen, CFO,                          +47 23626699 (mobile; +47 99644900)