PLYMOUTH MEETING, /PRNewswire-FirstCall/ SmartServ Online,
Inc. (OTC Bulletin Board: SSRV), a Mobile Virtual Network Operator (MVNO) that
provides mobile phone service with the best in low cost pre-paid minute plans and the latest in mobile content, announced today that it has signed a Letter of Intent to acquire Telco Group, Inc., and affiliates. Telco is a New York-based provider of pay-as-you-go wireless telecommunications services ([ >>> ] prepaid international long distance, nationwide dial around long distance ([ >>> ] and nationwide dial up high speed internet services ([ >>> ]

The completion of this transaction is expected to add over $300 million in
annual revenue.

«A combination of the two companies would bring together the network
infrastructure of Telco Group, Inc. and the sales and distribution of it’s
affiliates, with the mobile content technology, management expertise, and
marketing and branding resources of SmartServ,» said Robert Pons, CEO
SmartServ. «The combined resources would create a company with competitive
advantages in both the prepaid wireless and prepaid international businesses,»
added Mr. Pons.

«This exciting combination would create one of the leading full-service,
enhanced communications companies in the United States offering pay-as-you-go
wireless, prepaid international, nationwide dial around and high speed
internet services with one of the most experienced and highly effective
management teams in the prepaid communications sector,» said Sam Tawfik,
Telco’s founder and CEO.

Jefferies & Company, Inc is acting as exclusive financial advisor to
SmartServ with respect to this transaction and assisting in the raising of
related financing.

The closing of this transaction is subject to customary closing conditions
for these types of transactions. There can be no assurance that these
conditions will be met and that the transaction will be consummated.

SmartServ Online, Inc.(R)

SmartServ, headquartered in Plymouth Meeting, PA is a Mobile Virtual
Network Operator (MVNO) that provides mobile phone service with the best in
low cost, pre-paid minute plans, discounted international long distance, and
the latest in mobile content, such as ringtones, mobile games, and images.
SmartServ products and services are marketed under the UPHONIA™ brand. For
more information please visit: [ >>> ] and
[ >>> ]

Forward-Looking Statements

This news release may contain forward-looking statements that involve
risks and uncertainties. Forward-looking statements in this document and those
made from time-to-time by the Company are made under the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Forward-
looking statements concerning future plans or results are necessarily only
estimates and actual results could differ materially from expectations.
Certain factors that could cause or contribute to such differences are
described from time to time in the Company’s filings with the Securities and
Exchange Commission, including but not limited to, the «Risk Factors»
described under the heading «Certain Factors That May Affect Future Results»
in the Company’s Annual Report on Form 10-KSB/A for the year ended December
31, 2003 and other SEC filings.