Canada Payphone Corporation Calling Card Agreement With Canquest Communication Inc.

Canada Payphone Corporation, the fastest growing independent payphone operator in Canada announced today it has signed a firm agreement with Canquest Communications (Canada) Inc. to provide customized calling card services throughout Canada. Canada Payphone Corp. will use the extensive telecommunication network of Canquest Communications to offer the public, competitive prepaid calling card services. Calls can be originated from any public payphone, cell phone, residential or business line and capable of terminating all calls in over 240 countries. The calling cards will be supported by Canquest's multi-lingual 24/7 customer service center located in Chatham Ontario.

"This agreement marks a new dimension in our growing menu of public access telecommunication and transaction services and further enhances our commitment to diversifying our revenue stream", said Terry Novak the National Sales Director of Canada Payphone Corp. "We have had some experience with marketing the prepaid calling card services of other vendors and in tests performed last year we achieved very positive results. With our new competitively priced cards we expect first year card sales to constitute 10% of our gross revenues." This number will continue to grow as we focus our distribution to some of our national clients. This will be the first time Canada Payphone will be marketing and distributing its own customized cards on a national basis. The numerous payphone business relationships and the sites already established give us the necessary medium to ensure a successful and effective national distribution network. The new cards have already been distributed in high volume locations such as the Port of Vancouver, Canadian International College, independent retail Esso stations, correctional institutions, and youth hostels. 

Canquest is Canada's only licensed full service card platform provider offering a range of electronic transaction business solutions including prepaid & postpaid phonecards, prepaid Internet and prepaid cellular services with a proven track record in excellent customer service. "We view the relationship with Canada Payphone as a strategic move due to Canada Payphones extensive presence in the public telecommunications markets in Canada", states Mike Pugh, Senior Vice President, Corporate Planning & Development. "Canada Payphones presence in the market provides an expanded distribution and marketing channel for the deployment of the increasingly popular prepaid calling card services that offer convenience and competitive long distance rates."

Canada Payphone also announced today it has entered into an agreement with B.D.G., Inc. a Montreal based financial consulting firm to provide Canada Payphone financial consulting services as the company enters a new era of growth and financial expansion. 

Canada Payphone Corp. is listed on the Canadian Venture Exchange with the symbol CPY. The company reported revenues of $3.552M for the fiscal year ending September 30, 2001, which was a 42% increase over the same period for fiscal year 2000. This news release may include statements about future events and/or financial results that are forward looking in nature and subject to risks and uncertainties.

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