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Wireless VOIP Phone To Be First xMax(R) Consumer Product; Ultra Low-Cost Deployment Opens New Grassroots Markets
[March 28, 2006]

Wireless VOIP Phone To Be First xMax(R) Consumer Product; Ultra Low-Cost Deployment Opens New Grassroots Markets

SARASOTA, Fla. --(Business Wire)-- March 28, 2006 -- xG Technology(R), LLC today announced its first consumer product will be a wireless VOIP handset that will be available by the end of 2006. The phones will work on low-cost, easily deployed xMax(R) communications networks developed by the xG Technology engineering team.

The chip-based xMax technology is the lowest cost method yet developed for deploying competitive wireless services. xMax systems accomplish this by significantly increasing the range of transmissions, but at much lower power levels. xG Technology estimates that the cost of deployment will be 25 times less than a traditional wireless phone system. In other words, small companies, institutions, and communities can deploy wireless VOIP networks for thousands rather than millions of dollars.

"In the US, we plan to utilize a grassroots marketing campaign to roll xMax out on a viral basis," said Rick Mooers, xG Technology's CEO and Board Chairman. "To envision this, consider how the Internet Service Provider industry was originally built. Companies and institutions put up ISP networks but so did very small companies and individuals."


"Our business strategy is to meet an existing demand, not try to create a demand. Mobile VOIP meets that requirement," said Roger Branton, xG Technology's CFO and COO, noting the dramatic increase in the wired VOIP industry. He further explained that xG Technology has already secured the requisite relationships with contract manufacturers to ensure that scaling will not be an issue.

In order to make the xMax phones more attractive to consumers, the handsets will be dual-mode wireless. They will be equipped with WiFi chips so that users will be able to roam to areas not initially covered by the xMax networks. The handsets will also have Ethernet jacks that will let users plug into available data networks for fixed line VOIP calling.

In addition to delivering wireless VOIP handsets and base stations by the end of 2006, xG will be launching xMax enterprise-grade solutions for select applications by the beginning of the third quarter of this year.

Mooers said one question that remains unanswered is whether the xMax systems will be deployed first in the U.S. or overseas. "We're a U.S. company and would prefer to deploy the first systems here but there has been significant international interest and it may be more prudent to first enter the marketplace in another country," he said.

For additional information on xG Technology and the xMax system, please visit www.xgtechnolgy.com.

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