FREMONT, Calif., June 28 -- AltiGen® Communications, Inc. (Nasdaq: ATGN ) a pioneering manufacturer of VoIP business phone systems and call center solutions, announced today that its partner GraceCom Telecommunications has realized increased revenue and profits with the recent addition of AltiGen's VoIP Phone System product line.

GraceCom Telecommunications, an NEC reseller for 22 years, has been serving the telecommunications needs of businesses in New York. Over the past few years, as profit margins started to decline due to competitive factors, GraceCom found it increasingly difficult to grow revenue. After a search for a more competitive product offering, GraceCom discovered that AltiGen's solution was ideal. Since partnering with AltiGen, GraceCom has been able to expand sales to customers with multiple locations and advanced requirements such as call centers.

"We're extremely excited about the new markets we are able to address with AltiGen," said GraceCom owner Kevin Grace. "A recent example of how AltiGen is helping us is with an order placed for the first five systems of a 22 location bank, with the main location having 350 extensions. This regional bank has decided to standardize its IP phone systems with AltiGen as their solution. We have a backlog of ten additional systems for other new customers that we will be ordering soon. This is a very exciting product to sell and we look forward to continuing a mutually beneficial relationship."

The AltiGen VoIP phone system provides a high value versus cost solution for companies wanting more than a basic phone system. With AltiGen's VoIP, Call Center, Mobility, Call Recording, Self Management, and Reporting capabilities end users are finding their productivity increasing while their Total Cost of Ownership (TCO) is decreasing.

"Last fall we deployed AltiGen within GraceCom. The unique mobility aspect of the system allows our cell phones to operate as our office extension and has greatly increased the performance of our field sales and technical staff," said Grace. "We use the centralized recording capability for training and quality monitoring, and the real time call detail reports are invaluable at providing a view into company activity. Our day to day operations have greatly improved with the business insight AltiGen provides to GraceCom."

"Based on results to date, GraceCom is tracking to 100% year over year growth in both revenue and profits, which we attribute primarily to the expansion of our selling opportunities into higher value customers with AltiGen," said Grace. "AltiGen gives our customers the control, freedom, and mobility they have never experienced before."

About AltiGen Communications
AltiGen Communications, Inc. is a pioneering manufacturer of VoIP business phone systems and call centers solutions. AltiGen designs, manufactures and markets advanced, IP-PBX telephone systems and IP call centers that leverage both the Internet and the public telephone network. These products enable an array of applications that take advantage of the convergence of voice and data communications to achieve superior business results. AltiGen Communications products are available from independent authorized resellers and strategic partners. AltiGen's AltiServ(TM) family of telephony solutions has been recognized for excellence with more than 40 industry awards since 1996. Focused on the small to mid sized and multi-site businesses, AltiGen customers benefit from integrated solutions that protect their existing investments, while providing new ways to be more competitive, productive and to save money. For more information, call 1-888-ALTIGEN or visit the Web site at www.altigen.com .

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the continued market acceptance of our Voice over IP telephone systems and call center solutions in the SMB market, and our ability to allow our reseller partners to expand and grow their businesses profitability. These statements reflect management's current expectation. However, actual results could differ materially as a result of unknown risks and uncertainties, including but not limited to, risks related to AltiGen's limited operating history. For a more detailed description of these and other risks and uncertainties affecting AltiGen's performance, please refer to AltiGen's Annual Report on Form 10-K for the fiscal year ended September 30, 2005 and all subsequent current reports on Form 8-K and quarterly reports on Form 10-Q. All forward-looking statements in this press release are based on information available to AltiGen as of the date hereof and AltiGen assumes no obligation to update these forward-looking statements.