MTS, Mer Telemanagement Solutions Ltd. (NASDAQ Capital Market: MTSL), a provider of business support systems (BSS) for comprehensive telecommunication management and customer care & billing solutions, has signed a definitive agreement to acquire the telecom expense management and call accounting software assets of TelSoft Solutions, Inc. of Glendale, California. The acquisition will expand MTS’ TEM (Telecommunications Expense Management) solution.

“This acquisition is in line with our business objectives and delivers on our strategy to improve our market position, accelerate growth and profitability and as a result enhance shareholder value,” said Eytan Bar, President and CEO of MTS.

Under the terms of the agreement, MTS will acquire certain assets of TelSoft and assume certain enumerated liabilities. MTS will pay TelSoft $1.1 million in cash plus earn-out payments based on revenue milestones for the 12 month period following the acquisition. The acquisition is expected to be completed on July 31, 2006.

“We believe that the expansion of our installed customer base will accelerate the growth of MTS’ TEM (Telecommunications Expense Management) solution. The acquisition of TelSoft increases our U.S. market share and secures Telsoft’s commitment to its customers to provide advanced TEM solutions and a comprehensive product roadmap, above all.” Bar added.

About TelSoft Solutions
TelSoft Solutions, Inc. is a California-based privately held corporation located in the financial district of Glendale, California. Since 1985, TelSoft has been providing call accounting and telecom billing services to organizations with as few as 100 stations to large multi-location companies exceeding 100,000 employees. TelSoft enjoys meeting the challenges presented by their clients, many of whom have unique telecom expense management needs.

About MTS Mer Telemanagement Solutions
Mer Telemanagement Solutions Ltd. (MTS) is a worldwide provider of innovative solutions for comprehensive telecommunications expense management (TEM) used by enterprises, and for business support systems (BSS) used by information and telecommunication service providers.

Since 1984, MTS Telecommunications’ expense management solutions have been used by thousands of enterprises and organizations to ensure that their telecommunication services are acquired, provisioned, and invoiced correctly. In addition, the MTS’s Application Suite has provided customers with a unified view of telecommunication usage, proactive budget control, personal call management, employee cost awareness and more.

MTS’s solutions for Information and Telecommunication Service Providers are used worldwide by wireless and wireline service providers for interconnect billing, partner revenue management and for charging and invoicing their customers. MTS has pre-configured solutions to support emerging carriers of focused solutions (e.g. IPTV, VoIP, MVNO) to rapidly install a full-featured and scaleable solution. MTS’s unique technology reduces integration risks and lessens revenue leakage by using the very same system to manage retail and wholesale business as well as supporting multiple business units. Total cost of ownership (TCO) is reduced by providing web-based customer self-care and provisioning.

Headquartered in Israel, MTS markets its solutions through wholly owned subsidiaries in the United States, Hong Kong, The Netherlands, and Brazil, as well as through OEM partnerships with Siemens, Phillips, NEC and other vendors. MTS shares are traded on the NASDAQ Capital Market (symbol MTSL). For more information please visit the MTS web site: www.mtsint.com.