Exhibit 99.1

                      INTER-TEL ANNOUNCES E-RATE SETTLEMENT

TEMPE, ARIZONA . . . DECEMBER 8, 2004 . . . INTER-TEL, INCORPORATED (NASDAQ:
INTL) today announced that Inter-Tel Technologies, Inc., the Company's
wholly-owned subsidiary ("Inter-Tel"), has reached a settlement and is entering
into a plea agreement resolving the previously disclosed e-Rate investigation by
the Department of Justice.

E-RATE SETTLEMENT AND PLEA AGREEMENT. As identified in the Company's previous
filings with the Securities and Exchange Commission, Divisions of the United
States Department of Justice have been investigating other companies' and
Inter-Tel's participation in a federally funded "e-Rate program" to connect
schools and libraries to the Internet. Inter-Tel today announced that the
Department of Justice investigation into the Company is being resolved with a
civil settlement and plea agreement. In connection with the civil settlement,
Inter-Tel is agreeing to pay $6,740,458 and forego collection of accounts
receivable related to e-Rate of $259,542. In connection with the plea agreement,
Inter-Tel is entering guilty pleas to a charge of mail fraud and a charge of an
antitrust violation, will agree to pay a fine of $1,721,000, and will agree to
conditions of probation that include implementation of a rigorous compliance
program.

The resolution is currently expected to cost Inter-Tel approximately $9.5
million in total, including criminal fines, civil settlement and restitution,
uncompensated e-rate work, accounts receivable forgiveness, and related
remaining attorneys' fees and other expenses. The payments constituting the
primary components of the settlement are not tax deductible. The effect of the
resolution on fourth quarter results of operations is currently expected to be a
reduction to net income by approximately $8.9 million, after considering
accounts receivable reserves previously accrued and an income tax benefit of
approximately $0.3 million.

In addition, Inter-Tel is to be placed on three years probation, which requires
a comprehensive corporate compliance program, including hiring a compliance
officer to oversee the compliance program and policies, mandatory audits,
regular status reports, implementation of a separate e-Rate code of conduct,
certification of employee education and training, and periodic compliance
reporting.

"We are pleased to be reaching this settlement," said Steven G. Mihaylo,
Chairman and CEO. "While the employees directly involved with the matters in
question are no longer associated with Inter-Tel in any form, we take full
responsibility for their actions. We have begun to implement and will expand to
a more rigorous compliance program including review of current and future
government contracts. We will not tolerate any conduct that causes anyone to
question the integrity of our Company."

The plea agreement requires judicial approval before it is final.

ABOUT INTER-TEL, INCORPORATED

Inter-Tel (Nasdaq: INTL - news) offers value-driven communications products;
applications utilizing networks and server-based communications software; and a
wide range of managed services that include voice and data network design and
traffic provisioning, custom application development, and financial solutions
packages. An industry-leading provider focused on the communication needs of
business enterprises, Inter-Tel employs over 1,900 communications professionals,
and services business customers through a network of approximately 60
company-owned, direct sales offices and over 350 authorized providers in the
United States, United Kingdom and Japan. More information is available at
www.inter-tel.com.

This news release contains forward-looking statements within the meaning of
Section 27A of the



Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
including statements regarding anticipated settlement expenses and related fees,
the expected costs of forgiveness of accounts receivable and legal fees,
projected reductions to net income in the fourth quarter of 2004, requirements
to implement and maintain a more comprehensive corporate compliance program, and
toleration of conduct that questions the integrity of our company. Such
statements are based on current assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially from our
current expectations. These risks and uncertainties include, but are not
necessarily limited to the risk that the court will not accept the terms of the
plea agreement; Inter-Tel's actual total expenses may be different from the
anticipated costs outlined above; the potential impact of the settlement and
plea agreements, including possible suspension or debarment from future
contracts; the time, efforts and costs associated with the compliance program,
including the timely and successful hiring and retention of the compliance
officer and other requirements associated with the program; hiring and retention
of qualified employees and maintenance of required employee education and
training; the potential impact of market, industry, competitive and customer
reaction to the settlement and plea agreements. For a further list and
description of such risks and uncertainties, please see Inter-Tel's previously
filed SEC reports, including Inter-Tel's Annual Report on Form 10-K filed with
the SEC on March 15, 2004 and Inter-Tel's Form 10-Q filed with the SEC on
November 5, 2004. Inter-Tel disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.