ITS Networks 10Q Filing Reports Improvements over Previous Year

ITS Networks 10Q Filing Reports Improvements over Previous Year; Cost of Goods Sold Decreased by 32% and Gross Profit up to 34.6%

MADRID, Spain -/24 Feb, 2005 - Wi-Fi Technology News/- ITS Networks Inc (OTCBB: ITST) filed its 10Q for the quarter ending December 31, 2004, reflecting continual operational improvement with emphasis on cost reductions. ITS Networks, Inc., recent 10Q filing for the first fiscal quarter ending December 31, 2004 reporting a slight decrease of 1.5% in total revenues down from US$1,533,000 to US$1,510,000 in the same period 2003.

It is significant to note that the 2003 figure represents total sales including the postpaid fixed line business while the 2004 figure represents recurring prepaid sales. In addition, during this reporting period the Company reduced its Cost of Goods Sold by 32 % from US$ 1,457,000 equalling 95.0% of total sales to US$ 988,000 equalling 65.4% of total sales due to its successful restructuring and renegotiation with its Telecom carriers. As a result of the improvement of the carrier costs the Gross Profit of the Company went up from 5.0% to 34.6% of sales.

ITS Executive Vice-President, Herman de Haas explained, "The results we have reported indicate that the measures adopted by management over the last fiscal year are taking effect on the bottom line of the Company, bringing Teleconnect closer to a nearly breakeven monthly EBITDA position. We definitely left the period of cost restructuring and reduction behind us. Today, the Company is ready for 'multiplying the success'. Our focus in 2005 is the increase of recurring revenues through the launch of new services which contribute directly to the bottom line. Our objective is a healthy, profitable return on rapidly growing operations to increase shareholder value."

About ITS Networks:
ITS Networks, Inc. through its wholly owned subsidiary Teleconnect Comunicaciones S.A., a Spanish telecommunications company, is a major player in the prepaid telecoms industry in Spain. ITS Networks, Inc. is traded on a U.S. stock exchange, the Over The Counter Bulletin Board (OTCBB). ITS Networks provides commercial and residential users in Spain with a very competitive array of prepaid services. http://www.teleconnect.es

ITS Networks, Inc. is a featured Company on TelecomIndustryStocks.com