Leading voice and data communications provider, Telstra Europe Limited, announced today that it has signed an exclusive, five-year distribution partnership with Vistula Communications Services, Inc. The contract will allow Telstra Europe exclusive rights to distribute Vistula's V-Cube™ VoIP platform in the UK and Ireland. VoIP is the mechanism by which the Internet can be used to carry telephone calls.

V-Cube™ will be used as the central system to deliver Telstra Europe's Hosted VoIP PBX service to client groups in the UK and Ireland. In addition to a comprehensive set of telephony features, Telstra Europe and Vistula are creating a unique customer support portal that takes customers through sign-up, gives them control of their own VoIP domain, and gives them access to online features such as web based voice mail and statistical information about their usage.

David Thorn, Chief Executive Officer of Telstra Europe, said "We are delighted to have reached agreement with Vistula. After an extensive review of the market we believe that Vistula offers us a unique mix of high levels of functionality and flexibility combined with innovative, business-enabling commercial packaging."

"With our acquisition of Cable Telecom and more recently PSINet's UK assets, Telstra Europe is now able to fulfil its strategic objective of offering a combined suite of data and voice services to its growing client base."

Rupert Galliers-Pratt, Chairman and CEO of Vistula, commented: "This is the first contract that Vistula has secured with a customer for our VoIP platform. A number of companies are now offering VoIP products, but the benchmark test is whether or not they can secure customers. For Vistula to have signed its first contract with Telstra Corporation's fastest growing Offshore Business Unit represents a validation of Vistula's V-Cube™ product and endorses its suitability for the service provider market. Telstra has played a key role in assisting Vistula with product development, which has enhanced the V-Cube™ platform and made the integration work much simpler for future clients."

About Telstra Europe

Telstra Europe is a wholly-owned subsidiary of Telstra Corporation Limited (ASX:TLS). Operational in Europe for over 13 years, Telstra Europe offers an extensive range of voice and data services including total managed network solutions using Global IP-VPN (MPLS), Internet, ATM, Frame Relay, Private Lines, hosting and co-location services and enhanced voice solutions to medium sized business and multinational corporations in the UK. Additional value added services include fully managed CPE, network reporting, consulting, planning, project management and customer support seven days a week.

Delivering connectivity business solutions, value-added services and complex managed IP solutions, Telstra Europe's portfolio is complemented by its independently-owned and managed switched network. Switches are located in London, Birmingham and Manchester working alongside 14 co-location points throughout the UK. Additionally, a state-of-the-art, resilient data centre is located in London, Docklands.

Parent company, Telstra Corporation Limited, is a full service global telecommunications company. It has been ranked as the 5th best performing telco* in the world and is one of the few telcos with an A+ credit rating.

About Vistula

Vistula is a telecommunications company providing hosted, managed VoIP (Voice over Internet Protocol) services to carriers, service providers and transit network operators. Vistula features solutions that enable telecommunications providers to rapidly deploy VoIP services over converged infrastructure through an integrated applications suite.

"Forward-Looking Statements''

This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, which reflect management's expectations regarding future events and speak only as of the date hereof. Our actual results, performance or achievements may differ significantly from the results, performance or achievements discussed in or implied by the forward-looking statements. Factors that could cause such a difference include material changes in our business or prospects, difficulties obtaining financing to fund our operations, failure to establish brand recognition for our products, failure to retain existing customers or attract new customers, failure to compete effectively in our industry, general market and economic conditions, and other factors that are detailed from time to time in Vistula Communications Services' SEC reports, including those detailed in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004. Vistula Communications Services disclaims any intent or obligation to update any forward-looking statements.