Malones Market Update

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    HOMEX - Perth

    The Company confirms that New Tel is continuing its strategic
    programme as a full service telecommunications carrier.

    Further to an announcement to the market on 1 November 2002, the
    Directors have been in discussion with a number of parties to further
    develop New Tel's cashflow base and products and services through
    strategic alliances.

    New Tel is pleased to advise that in accordance with this programme,
    the Company has executed agreements with RSL Com Partners Pty Ltd and
    RSL Mobile Pty Ltd to provide operational telecommunications services
    and infrastructure to New Tel. As a result of these strategic
    alliances, New Tel will continue to improve positive cash flow from
    its telecommunications carrier, in accordance with the Company's
    strategic goals to grow the business profitably.

    The agreements will see RSL Com and RSL Mobile receive a contracted
    fee for services provided to New Tel, which is significantly less
    than the current costs incurred by New Tel in providing these

    The restructuring will result in the majority of New Tel's
    operational roles becoming redundant. The management of New Tel will,
    as soon as practicable, notify its employees of the effect of the
    restructure on their employment status. New Tel will fulfil its
    obligations to all redundant employees and pay out their full

    The restructuring has been designed not to affect New Tel's 75,000
    customers who will continue to access New Tel's quality products and
    services and receive the same high standard of customer service.

    New Tel expects to finalise documentation relating to this programme
    this week, and the Company will then be in a position to complete its
    annual accounts and provide the accounts to its auditors for
    finalisation of their audit review.

    Further to the announcement on 1 November 2002, the Company confirms
    it is not acquiring DigiPlus Investments Limited and its associated
    companies in Australia and New Zealand. As a result, the placement
    that was approved by shareholders on 22 August 2002 to partly fund
    the DigiPlus acquisition will not proceed. The Company is in the
    process of reclaiming the $4 million deposit that was paid to the
    DigiPlus vendors in connection with the proposed acquisition.

    The Directors also advise that, further to an announcement on 13
    October 2002 relating to New Tel's $22 million equity line with
    Global Emerging Markets (GEM), the Company has not drawn down any
    funds from this facility.

    P Malone

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