ECtel Ltd. (NASDAQ: ECTX), a leading global provider of Integrated Revenue Management™ (IRM™) solutions has agreed with the Office of the Chief Scientist of the Israeli Ministry of Industry, Trade and Labor (“OCS”) to conclude its outstanding balance to the OCS which sponsored research and development grant programs for its FraudView® solution.

ECtel will repay approximately $2.8 million of outstanding grants in four quarterly installments during 2007. The repayment will result in a one-time charge in the fourth quarter of 2006 and the Company expects a positive impact on earnings during 2007 and in the following years. Management based its decision on the reduced economic benefit it can now gain from participating in the program, due to recent increase in revenue as well as internal revenue growth projections from FraudView® attributed to the launch of FraudView® Release 8.

The role of the OCS is to assist in the development of new technologies in Israel, as a mean of fostering the Israeli economy, encouraging technological entrepreneurship, leveraging Israel’s science-skilled resources, supporting added value R&D, enhancing the knowledge base of Israeli hi-tech industries and promoting cooperation in R&D both nationally and internationally. Under the Israeli Encouragement of Industrial Research and Development Law, research and development programs that are approved by the OCS are eligible for grants of up to 50% of certain expenditures. In exchange, recipients are required to pay the OCS royalties from the revenues derived from products incorporating know-how developed within the framework of the OCS program, up to an aggregate of 100% of the grant plus interest.

“The R&D grants we received through the OCS were major contributors to our leadership in the field of fraud detection and prevention” , said Ron Fainaro, Executive Vice President and Chief Financial Officer of ECtel. “We would like to thank the OCS for its support throughout the program and for providing us the necessary resources to foster our intellectual property.”

About ECtel
ECtel (NASDAQ: ECTX) is a leading global provider of Integrated Revenue Management™ (IRM™) solutions for communications service providers. A pioneering market leader for over 15 years, ECtel offers carrier-grade solutions that enable wireline, wireless, converged and next-generation operators to fully manage their revenue and cost processes. ECtel IRM™ Product Suite features the world-leading fraud and revenue assurance products, FraudView® and RAP, that minimize operator revenue leakage across networks and operations support systems (OSSs). ECtel serves prominent tier one operators, and has more than 100 implementations in over 50 countries worldwide. Established in 1990, ECtel maintains offices in the Americas , Europe and Asia Pacific. For more information, visit www.ectel.com