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Letter to Shareholders

Dear Telit Shareholder,

Two years ago, when Telit's management team and I decided to take the company public, we had a vision. Our vision was that the growth in wireless communication had reached a tipping point. With the market for person-to-person communication (read: mobile phone) reaching saturation in the developed world, the potential for future growth would be in machine-to-machine communication (m2m).

The data seemed to be on our side at the time. Europe, for example, has over 300 million energy meters, 7 million monitored alarm systems and 3 million vending machines, most of which require an engineer to be physically present to monitor them. We knew there was a better and cheaper way to do this while adding substantial value to the customer.

At the time we had a fledgling m2m business, which many thought would never grow significantly. We thought differently and invested in research and development to create the most innovative m2m portfolio available.

Two years later, the results speak for themselves. We grew the company from a small R&D team to a global organisation, with offices in 11 countries and 1600 customers from 52 countries. Our revenues did not take long to follow - from a turnover of €5.8 million in 2003, Telit Wireless Solutions, our m2m business, generated €27.7 million last year, representing a compounded annual growth rate of 68%. Gross profits grew healthily as well, rising 170% from 2005 to 2006 alone.

Generating results such as these is no mean feat. To continue to do so will require a commitment to constant innovation, flawless execution and a team of highly talented individuals. It will also require shareholders who share our vision and believe in our ability to continue to translate a high-growth market into a high-growth business.

This is precisely what happened a few months ago with Franco Bernabè. Mr. Bernabè needs no introduction. He is one of Italy's most admired businessmen, having led both Telecom Italia and ENI, where he achieved the turnaround of the company and its successful privatisation. A former board member of Fiat, Mr. Bernabè currently serves on the Advisory Board of the Council on Foreign Relations and is a member of the Board of Petrochina, Acea and 3 Italia.

Recognising the potential behind m2m and the unique capabilities Telit had, Mr. Bernabè decided to join and support the management in buying a majority stake in the company by acquiring shares from our current majority shareholder Polar Investment Ltd. Under the terms of this deal, Boostt B.V., a consortium of investors led by Mr. Bernabè and myself, has today purchased 12,000,000 Telit shares from Polar at 43.6p per share for a total purchase price of £5,232,000. Following the transaction, Boostt has become the largest shareholder in Telit Communications plc, controlling 34% of the company’s shares.

The importance of this investment lies not only in the flexibility it provides us to execute our strategy - it serves as a vote of confidence in you, our shareholder, who despite challenging times continued to support us.

In addition to this investment, I am also happy to report to you that Mr. Chicco Testa has agreed to take on the position of Chairman of the Board of Directors of Telit. Mr. Testa has been a powerful force in the development of Telit since he joined the board of our Italian subsidiary in September 2005. Like Mr. Bernabè, Mr. Testa is a well known executive, having served as Chairman of ENEL, Italy's largest electricity company, as well as serving as a member of the Italian Parliament.

I know I can speak for Messrs Bernabè and Testa when I say that we are committed in continuing to invest all our efforts to grow the company, offer great value to our customers and a healthy return to you, our shareholders.

Last, I would like to take this opportunity to invite you to meet me whenever you feel comfortable. Please do not hesitate to contact me to coordinate a meeting (meet me).

Regards,

Oozi Cats – CEO

Telit Communications Plc