PETAH TIKVA, Israel -- ECtel Ltd. (Nasdaq: ECTX - News), a leading provider of Fraud Prevention and Revenue Assurance solutions, today reported financial results for the first quarter ended March 31, 2005.

Revenues for the first quarter of 2005 were $4.8 million, compared to $4.0 million for the fourth quarter of 2004, and $3.3 million for the first quarter of 2004.

Net loss for the first quarter of 2005 dropped to $0.8 million, or $0.04 loss per share, compared to net loss of $1.7 million, or $0.09 loss per share, for the fourth quarter of 2004, and net income of $2.9 million, or $0.16 per share, for the first quarter of 2004.

Commenting on the results, Mr. Eitan Naor, President and CEO of ECtel, said: "We are very pleased with this quarter's results. As we continued with the execution of our long-term growth plan, we have succeeded in achieving improvement in all main financial parameters. We further increased our revenues, improved our gross margin, decreased our net loss and achieved positive cash flow".

"During the first quarter, we continued witnessing demand for fraud protection solutions especially in CALA and Eastern Europe," Mr. Naor continued. "Our extensive sales efforts, resulted in several first-time orders and several follow-on orders from leading telcos in these two strategic regions. We are also evidencing demand from telcos for comprehensive fraud protection solutions which include protection of their IP and VoIP networks. ECtel has developed leading products to address these needs and we offer wireline and wireless carriers with state-of-the-art fraud protection solutions that cover all types of networks.

"On the revenue assurance market, we are encouraged by market indications that leading telcos are seeking product-based revenue assurance solutions. ECtel is well positioned to address this market by providing the leading network-wide fraud protection and revenue assurance solution based on one platform."

Mr. Naor concluded: "We plan to continue the execution of our long-term growth plan. With a superb and comprehensive product offering, a strong pipeline, increased backlog and a broad installed base, we are implementing our plans with the goal of returning to profitability within the next few quarters."

ECtel Ltd.