Formus Affiliate Launches Operations in Germany.

DENVER--(BUSINESS WIRE)--Aug. 9, 1999--

Callino GmbH initiates competitive local exchange service

Formus Communications Inc., an international provider of high-speed broadband wireless services, announced today that its German affiliate, Callino GmbH, has launched competitive local exchange carrier (CLEC) services in Germany.

"This is another exciting step for Formus in its European markets," said Osmo Hautanen, CEO of Formus. "Businesses and residents in Germany need the options of competitive pricing allowed through CLEC services. We are excited about doing business in Germany and are fortunate to be associated with Callino."

Callino, formerly known as Arcis, is a facilities-based telecommunications company headquartered in Munich, Germany.

Callino's initial network includes three voice-grade switches located in Munich, Stuttgart and Hamburg; seven points of interconnect into the local PSTN; and network capacity of 390 E1 circuits. Between now and the end of the year, additional interconnect points are expected to increase the capacity of the Callino network to 570 E1's.

Callino also will integrate a broadband wireless access network with its CLEC network to take advantage of the radio spectrum it was awarded by the German telecom authority. Once integrated, the network will be able to support high-speed, high-capacity communications services in the parts of Germany where the spectrum was awarded.

Callino offers a call-by-call service at rates of 14 pfennigs (US 7.6 cents) for prime daylight calling and 8 pfennigs a minute (US 4.3 cents) for evenings.

"We are deliberately starting with this tariff structure in a market segment dominated by price," Mr. Matthias Weber CEO of Callino said. "At the same time, our technology is such we can help assure that our customers will have a line available when needed."

Earlier this summer, Callino (as Arcis) received approval from Germany's communications regulatory agency, RTP (Regulierungsbehorde fur Telekommunikation und Post), to operate point-to-multipoint broadband wireless access (BWA) communications services at the 3.5 gigahertz and 26.6 Gigahertz radio frequency ranges for certain areas in Germany covering populations of approximately 26.7 million for the 3.5 GHz license and 15.5 million for the 26.6 GHz spectrum. A month earlier, the companies had been awarded the CLEC telecommunication licenses covering the entire country of Germany.

ABOUT FORMUS COMMUNICATIONS

Formus Communications, Inc. intends to integrate cost-effective, high-capacity broadband wireless access (BWA) technology to provide its customers with reliable high-speed Internet service, high-speed data transmission, video and voice services. Formus is focusing primarily on markets in Europe and Latin America. The company is presently involved in projects delivering BWA services in Argentina and Poland, and through an affiliate company, recently launched CLEC services in Germany. Formus is also operating trial BWA projects in France and Hungary (although it does not have permanent licenses for those countries) and intends to launch services in Colombia and Peru in late 1999.