CallWave Announces National Availability of First VoIP-Enhanced Cell Phone; First 1,000 Customers to Purchase at CallWavemobile.com To Receive Free, No Contract Phone with 60 Minutes of Airtime.

SANTA BARBARA, Calif. -- CallWave, Inc. (Nasdaq:CALL), a leading provider of VoIP enhanced services, today announced nationwide availability of the CallWave Mobile prepaid cell phone, the first pay-as-you-go phone service with VoIP-enabled features that help customers stretch their airtime, control their costs and enjoy a higher quality phone service.

To mark the launch, the company also announced a limited time "free phone" offer for customers who purchase the service at www.callwavemobile.com. The first 1,000 qualifying customers will receive a free no-contract phone with 60 minutes of airtime included.

The CallWave Mobile prepaid phone service offers an improved way for consumers to control their monthly cell phone budget and get more value for their money. Using proprietary VoIP technology, CallWave gives prepaid phone users powerful new "minute stretcher" features, including Mobile Call Screening(SM), Mobile Call Transfer(SM), and Follow Me Home(SM). Other features include email and SMS notification of voice messages and powerful PC VoIP software for managing calls and checking voicemail without airtime charges.

How it Works

Follow Me Home, CallWave's newest feature, allows subscribers to receive calls dialed to their mobile number on their home phone instead. Subscribers can use the Follow Me Home feature by simply turning off their CallWave prepaid cell phone when they are at home. Alternatively, subscribers can leave their phone on and Follow Me Home works automatically whenever the phone loses network coverage.

Mobile Call Screening and Mobile Call Transfer help customers control which calls they take and where they take them. Mobile Call Screening allows users to listen to voice messages in real-time and, if they choose, interrupt the message to take the call. Mobile Call Transfer lets users instantly transfer a live cell phone call to a home or office phone. Even when CallWave Mobile prepaid cell phone subscribers run out of prepaid minutes, CallWave's service will still take a voice message and deliver it to the user's email inbox or PC software.

The Real Promise of VoIP

"CallWave is providing consumers with value and features never before seen in the wireless industry," said David Hofstatter, president and CEO. "Our experience developing innovative VoIP-based services, coupled with our direct relationship with end-customers, has taught us that the real power of VoIP is in value added services like seeing all your cellular calls and voice messages on your desktop PC. VoIP also enables new handset features like pressing '1' to pick up a screened call, or '2' to move that call to your landline, which directly address consumer demand for privacy, cost control and improved call quality."

"Americans are increasingly choosing prepaid mobile phones to help control ballooning cell phone costs," adds Adrian van Haaften, CallWave's chief marketing officer. "CallWave is now introducing a new prepaid phone option that offers unprecedented value and new functionality with our VoIP-based minute-stretcher features. Whether it's a family that needs a cost-effective way to stay connected, or an individual who is tired of long term cell phone contracts, CallWave lets subscribers keep their budgets in check while enjoying a host of innovative mobile phone services like Follow Me Home."

CallWave Mobile is now available at www.callwavemobile.com.

About CallWave

CallWave (NASDAQ: CALL) is a leader in VoIP enhanced services for the consumer and small business markets. The company provides VoIP application services on a subscription basis that add features and functionality to both the landline and wireless telecommunications services used in homes and small offices. CallWave's proprietary VoIP software allows subscribers to get more out of their existing personal communications networks -- landline, mobile, and IP -- by adding software-based call-handling features, and by bridging all three networks to help subscribers get their important calls. Founded in 1998, CallWave is headquartered in Santa Barbara, Calif. For further information, please visit www.callwave.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

Statements in this press release regarding CallWave Inc.'s business, which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Quarterly Report or Form 10-Q for the most recently ended fiscal quarter.