XFONE, Inc. CEO Issues Letter to Shareholders LONDON and TEL AVIV, Israel, Jan. 24 /PRNewswire-FirstCall/ -- In a letter to Company shareholders, Guy Nissenson, Chief Executive Officer of XFONE, Inc. (OTC:XFNE) (BULLETIN BOARD: XFNE) , stated: "In 2004, XFONE firmly established itself as a growing international telecommunications company with an expanding global perspective by establishing our telecom platform in the United States, United Kingdom and Israel. XFONE has continued to demonstrate that, despite prevailing market conditions impacting others within the telecommunications space, telecom can indeed be profitable. In a relatively short time, our management team, through its devotion and vision, has been able to achieve steady, progressive execution of the corporation's growth strategies. "During 2004, XFONE entered the world's largest telecommunications market -- the United States. We negotiated the acquisition of eXpeTel Communications, a licensed telecom service provider based in Jackson, Mississippi. Although we are still working through the regulatory issues associated with the acquisition and hoping to close the transaction in the first quarter of 2005, we have already assumed the day-to-day operations of eXpeTel through a management agreement. Looking ahead, we intend to leverage this $5.5 million operation to gain greater market penetration in the U.S. market, growing our presence through the acquisition of other regional service providers. "In December 2004, XFONE successfully launched its international carrier business in Israel's growing $330 million telecommunications market. As one of only six licensed operators in this growing marketplace, we have long understood and appreciated the opportunity that Israel represents for XFONE's future growth. Following only a month of our '018' system operations, revenues have well exceeded our initial expectations and are trending steadily upward with each passing week. Consequently, we anticipate that our Israel operations will contribute measurably to XFONE's 2005 revenue growth. "It is important to note that our global expansion efforts have not diminished our focus on our traditional business in the United Kingdom. I am pleased to report that our United Kingdom operations have continued to perform well in 2004, achieving approximately 50% growth over the previous year. "Presently XFONE has over 65 employees based in three countries -- each of them dedicated and skilled and led by an exceptionally qualified and devoted management team. To all of them and to you, my fellow shareholders, I would like to extend my sincere appreciation for your unwavering support and my best wishes for our continued good fortune in 2005," concluded Nissenson. About XFONE, Inc. A U.S.-domiciled corporation, XFONE, Inc. is an international voice and data communications services provider with operations in the United States, United Kingdom, and Israel, and offers a wide range of services, which include: local, long-distance and international telephone services, prepaid and postpaid calling cards; cellular services; VOIP services; reselling opportunities; and email and fax broadcasting services. The Company serves customers in 75 countries across Europe, Australia, North America, South America, Asia and Africa. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: All information set forth in this news 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 the ability to: rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate, obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, license and sign new agreements; and 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, including the Registration Statement effective on November 12, 2004. For More Information, Please Contact: Elite Financial Communications Group Stephanie Noiseux, 407-585-1080 DATASOURCE: XFONE, Inc. CONTACT: Stephanie Noiseux of Elite Financial Communications Group, +1-407-585-1080, or , for XFONE, Inc. Web site: http://www.xfone.com/

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