U.S. Department of Homeland Security to Deploy Telkonet iWire System(TM) in U.S. Airports

December 26, 2006

GERMANTOWN, Md.--(Business Wire)--Telkonet, Inc. (AMEX:TKO), the leader in providing powerline carrier (PLC) networking solutions using existing electrical wiring, today announced that the Department of Homeland Security's Transportation Security Administration (TSA), in collaboration with the U.S. Army Information Systems Engineering Command Technology Integration Center, has successfully completed evaluation of the Telkonet's powerline networking platform. The Telkonet iWire System, which was approved for use, is scheduled for deployment within multiple Category II-IV airports starting in January 2007. Telkonet's enterprise IP-over-powerline system will be used to enable the rapid, cost-effective deployment of secure, high-speed network connectivity and other security applications to TSA-owned and operated workspaces within these airports.

Ronald W. Pickett, President and CEO of Telkonet, Inc. commented, "Telkonet has enjoyed enhanced awareness of its U.S. government-certified Telkonet iWire System platform in the federal and defense marketplace in recent months. This most recent win at DHS/TSA, which has been and will continue to be an important target for the Telkonet Government Systems team, represents a significant accomplishment for Telkonet as it further validates the value of the secure Telkonet platform in supporting homeland defense and security initiatives in the U.S. and abroad."

"As Telkonet Government Systems continues to grow its federal, state and local government customer base, we look forward to utilizing our industry-leading solution set, technology certifications and strategic partnerships to aggressively move the Telkonet product line into the mainstream government technology sector. Winning a place within the DHS/TSA core networking environment is a large and important step in the right direction and will provide a strong foundation from which to grow our channel program for IP-over-powerline focused-solutions and professional services," said John Vasilj, Vice President of Telkonet Government Systems.

Telkonet will be deploying its systems to help the TSA enhance communications between TSA field personnel and headquarters, support passenger and baggage screening personnel training and education in the field and provide a scalable network infrastructure for the introduction of other homeland security applications, as needed. These pilots, which Telkonet will begin installing in January, are the first part of a roll-out to potentially 380-plus airport deployments nationwide for which the TSA is planning to spend approximately $100 million as part of the multi-year High-Speed Operational Connectivity (Hi-SOC) program.

Pickett said, "The TSA's intention is to integrate the majority of its airport passenger and baggage systems and mission critical applications; from baggage/passenger screening (ETD/ETPs) and puffer machines that test for dangerous explosives and substances, to cameras at ticket counters and passport readers. We are currently negotiating with the appropriate DHS contract holders in preparation to respond to and win the forthcoming bid for the delivery of the next phase of the Hi-SOC program expected to be made public early next year."