VISTULA COMMUNICATIONS’ V-CUBE™ PLATFORM DEPLOYED AS KEY PART OF TELSTRA’S HOSTED IP-PBX SERVICE

NEW YORK – Jul 11, 2006 -- Vistula Communications Services, Inc. (OTC Bulletin Board: VSTL), a global supplier of flexible and reliable Voice over Internet Protocol ("VoIP") services to major telecommunications carriers and Internet service providers, today announced that Telstra Europe has officially launched their V-Cube™-based Hosted IP-PBX Service across the UK.

Richard Gandon head of Product Management and Development at Telstra Europe said “I am pleased to announce that as of Monday 3rd July 2006, Telstra is able to offer a SIP-based, Voice over IP, Hosted PBX solution that provides a highly competitive alternative to traditional PBXs.”

Richard went on to say “This offer is another example of the execution of our strategy to deliver global IP services to enterprises on both a direct basis and indirectly by working with partners to create IP solutions for resellers serving small and medium-sized enterprises. Our Hosted PBX service is a compelling solution that integrates the performance and resilience of our flexible IP and Voice capabilities with an advanced suite of IP PBX services from Vistula Communications. With this package, small and medium enterprises can take the first step towards implementing IP telephony."

A truly ‘converged’ set of end-to-end services
Telstra’s Hosted PBX offers three pay-as-you-go service bundles for standard, enhanced and premium users, plus an operator console for multi-line call supervision. Some of the other features include voicemail (accessible via phone or web interface), abbreviated dialling, conferencing, a soft phone and roaming. A Web portal is provided for users and administrators to manage their service profiles and to provide performance statistics and billing information. Geographic and non-geographic numbers are also available.

The service can be scaled up or down in step with an enterprise's changing needs and includes a choice of network access options from Telstra’s portfolio. Consolidating voice and data traffic over a single IP platform opens the way for considerable savings on network costs. Charges are levied on a monthly per-user basis, making telecom budgeting easier. All on-net calls are included in the monthly recurring cost of the extension, including calls between different sites. The service is available initially in the UK.
David Jones, Managing Director of Communications Advisory Services, a Telstra customer said, “We took a tiered approach to implementation starting with a LAN upgrade. We successfully transferred our fax and broadband service to Telstra and then installed the IP Phones which worked immediately. The quality of the service is excellent and beyond our expectations. The use of the hosted PBX technology is most valuable for companies like ours that want the flexibility to grow without any restrictions. Telstra’s hosted system represents a business enabler for us and not a business barrier as we have felt with other systems in the past.”

Adam Bishop, CEO of Vistula UK, said “Many people have worked very hard and broken new ground to bring this product successfully to market and I could not be more pleased with the reaction of Telstra and Telstra’s customers.”

Mr. Bishop continued, “We have benefited tremendously from Telstra’s depth of experience which has meant that they are able to go to market with an extremely robust, feature rich and usable service set. We are very excited about the future which has started with Vistula providing one of the first fully operational Hosted IP-PBX services in the world.”

About Vistula
Vistula is a telecommunications company providing hosted, managed VoIP (Voice over Internet Protocol) services to carriers, cable operators, service providers and transit network operators. Vistula features solutions that enable telecommunications providers to rapidly deploy VoIP services over converged infrastructure through an integrated applications suite. Vistula has already signed Telstra Global business unit, as well as IUSACom in Mexico, among many other international carriers and ISPs that have installed or are currently testing the V-Cube(TM) platform. Vistula trades on the OTCBB under the symbol: VSTL. For more information visit: http://www.vistula.com.

About Telstra Europe
Telstra Europe is a wholly-owned subsidiary of Telstra Corporation Limited (ASX:TLS). Operational in Europe for over 14 years, Telstra offers an extensive range of voice and data services including total managed network solutions using Broadband, MPLS Wide Area Networks, Internet Access and Point-to-Point Connectivity, hosting and co-location services and enhanced voice solutions to medium sized business and multinational corporations in the UK. Additional value added services include fully managed CPE, consulting, planning, project management, and Telstra’s online Service Tools application, which enables customers to monitor their network and manage support tickets at any time.

Delivering connectivity business solutions, value-added services and complex managed IP solutions, Telstra Europe’s portfolio is complemented by its independently-owned and managed switched network. Switches are located in London, Birmingham and Manchester working alongside 14 co-location points throughout the UK. Additionally, state-of-the-art, resilient data centres are located in London, Docklands, Cambridge and Sunderland.

Parent company, Telstra Corporation Limited, is a full service global telecommunications company.

This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.

This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, which reflect management's expectations regarding future events and speak only as of the date hereof. Our actual results, performance or achievements may differ significantly from the results, performance or achievements discussed in or implied by the forward-looking statements. Factors that could cause such a difference include material changes in our business or prospects, difficulties obtaining financing to fund our operations, failure to establish brand recognition for our products, failure to retain existing customers or attract new customers, failure to compete effectively in our industry, general market and economic conditions, and other factors that are detailed from time to time in Vistula's SEC reports, including those detailed in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005. Vistula disclaims any intent or obligation to update any forward-looking statements.

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