Talk America To Launch New Broadband Voice Bundle in Q3; Expect Increased Returns from Reduced Consumer Marketing Spend; Strategy Shift Changes Financial Guidance

Ed Meyercord, Talk America's Chief Executive Officer and Presidentcommented, "We've made the decision to shift our marketing spend awayfrom standalone voice services. With the investment in our state ofthe art broadband network behind us, we can afford to offer highbandwidth services with very low incremental costs. Our servicebundles will deliver significant value to customers versus the currenttelco and cable offerings while delivering attractive financialreturns."

Mr. Meyercord continued "our new broadband offer for businesscustomers will complement our suite of T-1 business services as a keydriver of future growth. Growth in commercial services has gainedmomentum in the second quarter in our key markets in Michigan, Ohioand the Southeast. We expect our commercial business to beapproximately 42% of total revenue by end of the year."

In connection with our shift in marketing strategy we are revisingour financial guidance. For the year ended 2006, we expect revenues tobe in a range of $437 to $443 million and Adjusted EBITDA to be in arange of $53 to $58 million. For the second quarter, we expect ourrevenues to be in a range of $112 to $114 million and Adjusted EBITDAto be in a range of $11 to $13 million. We continue to be in a strongfinancial position, generating free cash flow, with no debt and over$30 million in cash.

About Talk America

Talk America, is a leading competitive, integrated communicationsprovider that offers high speed Internet access and phone services toboth business and residential customers. Services include dataservices such as high-speed connectivity, and local and long distancephone service, security, web hosting, and network services. TalkAmerica delivers value in the form of savings, simplicity and qualityservice to its customers through its leading edge network andaward-winning back office.

Please Note:

The statements contained herein regarding the future results ofoperations 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, our inability to integrate effectively and asanticipated acquired businesses, dependence on the availability andfunctionality of local exchange carriers' networks as they relate tothe unbundled network element platform, failure to operate our ownlocal network in a profitable manner, increased price competition forlong distance, local and data services, failure of the marketing ofthe bundle of local and long distance services, long distance servicesand data services under our direct marketing channels to a smallermarketing footprint, attrition in the number of end users, failure tomanage our collection management systems and credit controls forcustomers, interruption in our network and information systems,failure to provide adequate customer service, and changes ingovernment policy, regulation and enforcement and/or adverse judicialor administrative interpretations and rulings relating to regulationsand enforcement. Additional information concerning these and otherimportant factors can be found within Talk America's filings with theSecurities and Exchange Commission. The forward-looking statementscontained herein are made only as of the date of this release, and weundertake no obligation to update the forward-looking statements toreflect subsequent events or circumstances. For a more detaileddiscussion of these factors, see the Risk Factors discussion in Item1A of our Annual Report on Form 10-K for the year ended December 31,2005 filed March 16, 2006, as amended by our Form 10-K/A filed March28, 2006.