Talk America to Acquire Network Telephone

Talk America (NASDAQ:TALK) announced today that it hasentered into a definitive agreement to acquire Network TelephoneCorporation, a leading facilities-based communications providerserving business customers in the BellSouth region. The merger willextend Talk America's networking footprint to the Southeast and addsignificantly to its commercial services capabilities. The transactionwill also allow Talk America to realize capital expenditure savingsand networking synergies in the Atlanta market, where NTC has 22 endoffices and Talk America has over 25,000 customers.

Ed Meyercord, Chief Executive Officer and President of TalkAmerica, said "This will create growth opportunities for bothcompanies and strengthen our ability to capture market share in theSoutheast. We will add high-end IP services to NTC's product portfolioutilizing our soft-switching infrastructure and leverage NTC'sextensive networking assets to deliver voice and broadband services tosmall and medium sized businesses and consumers in new markets. Thiscombination will also accelerate the migration of our Atlantacustomers onto network facilities and add significantly to ourcommercial revenue base."

NTC is a privately held company based in Pensacola, Florida andserves over 16,500 business customers representing more than 150,000voice and data equivalent lines throughout 8 states in the BellSouthregion. Among NTC's commercial accounts, approximately 8,500 are T-1customers served from 154 end offices. NTC provides voice, data,hosting, virtual private network and data back-up services through an80-person direct sales force. NTC has invested capital of over $240million.

Leo Cyr, Chief Executive Officer and President of NTC, commented"We are excited to become part of the Talk America team. They haveexecuted impressively on their networking buildout in Michigan,migrated over 150,000 voice lines to their own network facilities andexpanded into commercial services through their acquisition of LDMI.Talk America has a unique back office capability and a soft-switchingplatform that will allow us to leverage our existing networking assetsand grow our business."

Mr. Meyercord continued, "The management and employees at NTCbring significant value and depth to our team. Their experience in thecommercial market will allow us to elevate our service levels in allgeographic markets. With the acquisition and integration of LDMI andthe closing of the NTC transaction, Talk America will be poised forfurther expansion in 2006."

At the closing of the transaction, Talk America will payapproximately $20 million, including transaction fees, in exchange forall of the stock of NTC. NTC is expected to generate $60 million inrevenue and $5.5 million in EBITDA in 2006, including the impact ofmerger related synergies. Talk America will fund the purchase priceout of cash on hand.

The NTC transaction has been approved by the board of directors ofboth companies and is subject to certain regulatory approvals, whichboth companies expect to receive. The companies expect that thetransaction will close in early 2006.

CONFERENCE CALL

Talk America and Network Telephone management will host aconference call to discuss the acquisition of Network Telephone at8:00 a.m. ET on October 19, 2005. The call can be accessed by dialingthe following: US (877) 690-6769, International, (212) 231-2662. Areplay of the call will be available through 7:00 p.m. ET on October26, 2005 by dialing the following: US (800) 633-8284, International(402) 977-9140. The reservation number for the replay is 21265900.

About NTC

Network Telephone serves more than 16,500 small business customerswith phone and Internet services including local and long distancetelephone, high-speed Internet, Web hosting, Data Backup, VPN service,Conferencing, and more. The company employs more than 375 at itsheadquarters in Pensacola, Fla., and at regional sales offices locatedin Alabama, Louisiana, Mississippi, Florida, Georgia, Kentucky, NorthCarolina and Tennessee. Network Telephone was named one of America'sfastest-growing private companies by Inc. magazine in 2003 and 2004.For more information about Network Telephone, visit the company's Website at www.networktelephone.net

About Talk America

Talk America is a leading competitive communications provider thatoffers phone services and high speed internet access to bothresidential and business customers. Talk America delivers value in theform of savings, simplicity and quality service to its customersthrough its leading edge network and award-winning back office.

Please Note: The statements contained herein regarding theconsummation of the acquisition of NTC, the future results of NTC andthe effects and results of the acquisition on the business and resultsof operations of Talk America should be, and certain other of thestatements contained herein may be considered forward-lookingstatements within the meaning of Section 27A of the Securities Act of1933 and Section 21E of the Securities Exchange Act of 1934. Suchstatements are identified by the use of forward-looking words orphrases, including, but not limited to, "estimates," "expects,""expected," "anticipates," "anticipated," "forecast," "guidance," and"targets". These forward-looking statements are based on our currentexpectations. Although we believe that the expectations reflected insuch forward-looking statements are reasonable, there can be noassurance that such expectations will prove to have been correct.Forward-looking statements involve risks and uncertainties and ouractual results could differ materially from our expectations. Inaddition to those factors discussed in the foregoing, importantfactors that could cause such actual results to differ materiallyinclude, among others, the non-completion of the NTC acquisition orour inability to integrate effectively and as anticipated the businessof NTC upon the completion of the acquisition, dependence on theavailability and functionality of local exchange carriers' networks asthey relate to the unbundled network element platform, failure toestablish and deploy our own local network as we plan to do or tooperate it in a profitable manner, increased price competition forlong distance and local services, failure of the marketing of thebundle of local and long distance services and long distance servicesunder our direct marketing channels to a smaller marketing footprint,attrition in the number of end users, failure to manage our collectionmanagement systems and credit controls for customers, interruption inour network and information systems, failure to provide adequatecustomer service, and changes in government policy, regulation andenforcement and/or adverse judicial or administrative interpretationsand rulings relating to regulations and enforcement, including, butnot limited to, the continued availability of the unbundled networkelement platform of the local exchange carriers network and unbundlednetwork element pricing methodology.

For a discussion of such risks and uncertainties, which couldcause actual results to differ from those contained in theforward-looking statements, see the discussions contained in ourQuarterly Report on Form 10-Q filed August 9, 2005, our Annual Reporton Form 10-K for the year-ended December 31, 2004, filed on March 16,2005, as amended by our Form 10-K/A filed March 30, 2005, and anysubsequent filings. We undertake no obligation to update ourforward-looking statements.