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                                  NEWS RELEASE

FOR IMMEDIATE RELEASE

                                     Contact:  SmarTalk TeleServices
                                               Pamela Bennett
                                               Manager, Corporate Communications
                                               (614) 789-8650




                SMARTALK ANNOUNCES DISCOVERY OF ACCOUNTING ISSUES

     Thursday,  January 7, 1999 (Columbus,  Ohio): SmarTalk  TeleServices,  Inc.
(Nasdaq:SMTK;  the "Company") today announced that it has discovered  accounting
issues that will likely require a restatement of previously reported results for
the third quarter  ended  September 30, 1998 and are expected to have a material
adverse  effect on such results.  The Company has  discovered  issues that could
decrease by approximately $3.6 million the Company's  previously  reported third
quarter revenues of $59.8 million, increase third quarter costs by approximately
$2.2 million,  and could increase by approximately $0.21 the previously reported
third  quarter  net loss per share of $0.82.  These  preliminary  estimates  are
currently being reviewed and have not been fully





quantified.  There can be no assurance  that the Company will not discover other
accounting  issues that could materially  adversely affect  SmarTalk's  restated
third quarter financial results.

     It is expected that the Company will experience difficulty in financing its
liquidity  requirements,  both in the long  and  short  term.  The  Company  has
retained Zolfo Cooper LLC to provide management assistance.

     SmarTalk TeleServices,  Inc. is a leading provider of prepaid calling cards
and  prepaid  wireless  services.  Based in  Dublin,  Ohio,  SmarTalk  maintains
distribution   agreements   with  the  U.S.  Postal  Service  and  leading  mass
merchandisers, consumer electronics retailers, supermarkets, hotels, home office
superstores  and  convenience  stores  throughout  North  America  and the  U.K.
SmarTalk also creates  promotional  card programs for  advertisers and corporate
clients. Visit the SmarTalk website at www.smartalk.com.


Note:  Certain  statements  made  herein that are not  historical  in nature are
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation Reform Act of 1995 including:  the estimated impact of the accounting
issues on the Company's financial results,  including its net loss for the third
quarter  ended  September  30,  1998;  and the  Company's  ability  to  continue
financing  its  liquidity   requirements.   Investors  are  cautioned  that  all
forward-looking  statements  involve  risks and  uncertainties  that could cause
actual results to differ materially from those expressed in such forward-looking
statements.  These risks  include,  without  limitation,  risks relating to: the
possibility  that additional  accounting  issues may be identified in connection
with the anticipated restatement;  the risk that the SEC could disagree with the
Company's  accounting  treatment  with  respect  to  specific  items;   possible
difficulty in obtaining financing to meet the Company's liquidity  requirements;
and difficulty in integrating the Company's operations.  Investors who seek more
information  about the Company's  business and relevant risk factors may wish to
review the  Company's SEC reports,  including,  without  limitation,  its Annual
Report on Form 10-K for 1997 and its Quarterly  Reports on Form 10-Q, as each of
such documents may be amended.

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