MicroTel Announces Implementation of an Additional $310,000 of Annualized Cost Reduction at its XIT Subsidiary

Business Wire, August 9, 1999

ONTARIO, Calif.--(BUSINESS WIRE)--Aug. 9, 1999--

MicroTel International Inc. (the "company") (OTC BB:MCTL) Monday announced that its XIT subsidiary has implemented the final phase of cost-reduction measures at its Ontario facility.

This final measure is expected to reduce annual operating expenses by approximately $310,000 commencing in August 1999 and is part of an overall strategy of eliminating certain non-core, low margin display and subsystem assembly product lines while continuing to focus all remaining resources on XIT's high-margin digital switch products.

Commenting on the completion of the implementation of this strategy, William J. Miller, vice president and general manager, stated, "This division was MicroTel's most profitable business operation in 1998 and the cost reductions totaling $425,000 that we announced in July 1998 combined with these recent measures will assure that this operation continues to contribute a high level of profitability to MicroTel going forward."

James P. Butler, MicroTel's CFO commented, "These actions, together with the recently announced cost reductions at our CXR subsidiary, are indicative of the strong bottom-line focus the corporation has in its efforts to return MicroTel to the profitability trend established in 1998."

MicroTel International is a holding company for its three wholly owned subsidiaries -- CXR Telcom Corp. in Fremont, Calif.; CXR S.A. in Paris; XIT Corp. in Ontario; and its 41% owned affiliate company Digital Transmission Systems Inc. located near Atlanta.

CXR Telcom, CXR S.A. and Digital Transmission Systems design, manufacture and market electronic telecommunication test instruments, wireless and wireline voice, data and video transmission and networking equipment. XIT designs, manufactures and markets information technology products, including input and display components, subsystem assemblies and power supplies. The company operates out of facilities in the United States, France, England and Japan.

The statements in this news release relating to matters that are not historical are forward-looking statements which involve risks and uncertainties including, without limitation, economic and competitive conditions in the markets served by the company affecting the demand for the company's products, product pricing, market acceptance, access to distribution channels and other risks detailed from time to time in the company's Securities and Exchange

Commission filings. These risks could cause actual results to differ materially from those anticipated or described herein.