Preferred Voice Comments on Today's Announcements by Phillips Speech Processing and by KMC Telecom Holdings

Business Wire, June 17, 1999

DALLAS--(BUSINESS WIRE)--June 17, 1999--

Responding to inquiries from this morning's announcements by Phillips Speech Processing, a subsidiary of Phillips Electronics NV (AMEX:PHI) (NYSE:PHG) and by KMC Telecom Holdings, a privately held facilities-based competitive local exchange carrier based in Bedminster, N.J., Preferred Voice (OTC BB:PFVI) said the deals represent "a major step forward for the Company."

Ray Miller, Preferred Voice Chairman and CEO, called it "a validation of four years of research and development that has resulted today in the largest purchase order for speaker independent speech recognition equipment ever issued by a CLEC (competitive local exchange carrier) in North America for Natural Dialogue Speech Recognition technology."

Here is a summary of the agreements announced:

1). Preferred Voice has licensed KMC to purchase and install its

proprietary Voice Integrated Platform (VIP) in a minimum of 39

cities throughout the United States. This is a multi-year

agreement that is expandable to include up to 120 cities at KMC's

option.

2.) Phillips has agreed to provide the core technology called Natural

Dialogue Speech Recognition to support the ongoing development of

Preferred's VIP system. The VIP system is a specialized call

processor that delivers a number of enhanced speech recognition

services to customers from a central office location.

3.) Preferred has retained Plano, Texas-based Alliance Systems to

manufacture the VIP platform to its specifications, and has

committed to deliver the first 23 VIP Platforms to KMC before the

end of this calendar year.

4.) KMC's customers in the designated cities will be the first to

have access to speech recognition technology as part of their

basic phone service.

Both Preferred and Phillips expressed the belief that today's agreement with KMC will spur other carriers that are currently in discussion with Preferred Voice to complete similar deals.