Urban Communications Inc. Completes $1,800,000 Shares for Debt Settlement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 5, 2007) - Urban Communications Inc. (TSX VENTURE:UBN) announces the issuance of 2,483,976 new common shares at $0.60 per share, and 485,225 shares at $0.50 per share, totalling 2,969,201 shares, pursuant to debt settlement agreements with three members of senior management of the Company. In addition, a further 284,415 shares were issued at $0.25 per share on a conversion of $71,103 of third party debt under the terms of a loan agreement. The issuance of shares to senior management and the third party extinguishes total debt of $1,804,101.61 as of June 26, 2007.

All of the management loans were converted at amounts significantly above the trading price of the Company's shares at the date of settlement. The third party loan agreement carrying the right of conversion was made when shares of the Company were trading at $0.10. These transactions were all done in support of the Company's efforts to attract capital equipment financing to expedite the rollout of Internet, voice and TV services to residential and commercial customers on the Company's fibre optic network, and confirms the commitment of management and the confidence of third party lenders in the future of the Company.

These agreements, which were subject to regulatory approval, were first announced May 15, 2007, and regulatory approval was given on June 26, 2007. In addition, the management shares being settled are subject to a voluntary pooling agreement in accordance with standard TSX Venture Exchange policies.

In compliance with B.C. Securities Commission and TSX Venture Exchange requirements, the shares issued are subject to a hold period and may not be traded in British Columbia until October 27, 2007, except as permitted by the British Columbia Securities Act and Regulations made thereunder. In addition, without prior written approval of the TSX Venture Exchange and compliance with all applicable securities legislation, the shares may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until October 27, 2007.

About Urban Communications Inc.

Urban Communications Inc., through its operating subsidiaries, is a full service telecommunications company providing a range of next generation IP application services to residential and commercial clients in British Columbia. The company's services include developing and operating leased fibre optic networks, engineering design and construction of advanced telecommunications systems to facilitate delivery of video, telephone and broadband Internet services, outside plant and maintenance of the networks plus product sales. Urban Communications is a telecommunications integration company providing end-to-end, turnkey services to meet the demands of its diverse, national telecommunications customers who require the full scope of fibre, cable and wireless technical services. Urban can deliver cost effective media rich solutions via state-of-the-art carrier grade infrastructure designed to reach both residential and business consumers.

Shares issued: 31,627,105

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.