XFN Xfone Common Stock

Company's "Swiftnet" Operations to be Renamed XFONE U.K. LONDON, May 31 /PRNewswire-FirstCall/ -- XFONE, Inc. (AMEX:XFN), an international diversified communications services company, today announced that it has signed a Definitive Agreement to acquire Equitalk.co.uk Limited, a privately held telephone company based in the United Kingdom, in a restricted stock and warrant transaction valued at $1.65 million. Upon the completion of the acquisition, Equitalk shall become a wholly-owned subsidiary of XFONE, Inc. Specific terms of the acquisition may be found by viewing a related Form 8-K filed yesterday with the U.S. Securities and Exchange Commission. Founded in December 1999 by John Mark Burton and James Ruane, Equitalk, a VC-financed company, was the U.K.'s first fully automated e-telco. It provides both residential and business customers with low-cost IDA and CPS voice services, broadband and teleconferencing. Anyone with a British Telecom (BT) line can use Equitalk to cut their BT phone bill. Customers simply register online, and are not required to switch from BT for line rental. Serving thousands of customers each day, Equitalk achieved approximately $2.1 million in revenues in 2005. Guy Nissenson, President and Chief Executive Officer of XFONE, Inc., stated, "As the genesis of XFONE, Inc., our U.K. business operating as Swiftnet, has grown from a fledgling start-up in 1990 to over $14 million in annual sales in 2005, largely by providing facilities-based services to telecommunications resellers in the United Kingdom. However, to enhance XFONE's strong and steady financial performance over the years, we felt that the time had arrived to implement a much more ambitious growth strategy centered on capturing greater market share in the highly competitive U.K. market." Continuing, Nissenson added, "With the strategic acquisition of Equitalk, we believe we have found an ideal complement to our U.K. business that greatly strengthens its growth platform, enhances its underpinning value proposition and diversifies its revenue channels with a strong, well established, direct customer base. Moreover, we are winning proven executive leadership in John Burton, who has agreed to serve as the Managing Director of our operations in the U.K. on an on-going basis, upon the closing of this acquisition. In keeping with XFONE, Inc.'s universal branding strategy, I'm also pleased to announce that we are renaming Swiftnet to XFONE U.K." Commenting on the acquisition and his appointment with the Company, Burton noted, "The combination of Equitalk with Swiftnet, which will be re-branded under XFONE U.K., marks a significant milestone for all of us and serves as the first critical step in advancing our exciting new business plan. Charged with leading XFONE U.K., I look forward to working closely with Guy to execute a series of focused strategies designed to rapidly distinguish our Company as a leader in the U.K. telecom industry and as a preferred supplier of a comprehensive range of low cost and high quality voice, video and data products to our customers." Burton will bring to XFONE U.K. strong entrepreneurial and executive management expertise in the telecom field. Prior to founding Equitalk, Burton founded and served as Managing Director of Nexus Telecom Limited. Under his leadership, Nexus' designed and developed an award-winning server-based soft switch that gained BABT and IBM approval. Prior to Nexus, Burton was recruited by Griffin International to serve as Business Development Manager tasked with broadening the telecoms markets in which the Company operated. He also served as R&D Manager at Nortel Networks, where he held line and project management responsibility for 30 engineers based in the United States and United Kingdom and for manufacturing operations in the Far East. His team designed and developed the hardware and software for a next generation, open architecture PBX system. Burton is a graduate of the University of Liverpool where he earned a BEng degree in Electronic Engineering. He also holds an MBA from the Cranfield School of Management and a CEng MIEE designation from the Institute of Electrical Engineers. About XFONE, Inc. A U.S.-domiciled corporation, XFONE, Inc. is a voice, video and data communications services provider with operations in the United Kingdom, the United States and Israel that offers a wide range of services, which include: local, long distance and international telephone services; prepaid and postpaid calling cards; cellular services; reselling opportunities; and email and fax broadcasting services. The Company serves customers across Europe, Asia, North America, South America, Australia and Africa. This press release contains forward-looking statements. The words or phrases "should," "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." The Company's financial results reflected above should not be construed by any means as representative of the current or future value of its common stock. All information set forth in this press release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, and license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the Securities and Exchange Commission. For More Information, Please Contact: At XFONE, Inc. Alon Mualem, Chief Financial Officer, 011-972-39254446 or via email at Or Elite Financial Communications Group Dodi Handy, 407-585-1080 or via email at DATASOURCE: XFONE, Inc. CONTACT: Alon Mualem, Chief Financial Officer of XFONE, Inc., +011-972-39254446, or ; or Dodi Handy of Elite Financial Communications Group, +1-407-585-1080, or Web site: http://www.xfone.com/

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