XFONE USA Completes Jackson, Mississippi Co-Location Build Out.

JACKSON, Miss. -- XFONE, Inc. (AMEX, TASE: XFN), an international diversified communications services company, today announced that its wholly-owned subsidiary, XFONE USA, Inc. has completed its ATM facilities-based co-location build out in the central offices of the Regional Bell Operating Company (RBOC) in Jackson, Mississippi. The completion of this project provides end-users with a direct connection to the Company's switching facilities.

Wade Spooner, President and Chief Executive Officer of XFONE USA said, "Converting our customers to our own facilities enables us to directly manage the telecommunications service provided to our customers, thereby reducing costs and allowing pro-active customer service solutions."

XFONE USA has transitioned its residential customers in the Jackson area to its integrated voice/data high speed digital based network from the RBOC legacy network. The transition of the Company's business customers is expected to be completed by the end of February. Additionally, the Company has completed the migration of its DSL customers from the PVC (Private Virtual Circuit) based service to PPPoE (Point to Point Over Ethernet), which is also expected to lead to increased gross margins.

Guy Nissenson, President and Chief Executive Officer of XFONE, Inc. commented, "The completion of our Jackson, Mississippi build out considerably strengthens our position in the U.S. and is a notable step in the integration of our U.S. acquisitions. Moving customers to our own facilities is a cornerstone of our growth strategy, helping us to not only provide industry leading customer service, but also strengthen our margins."

About XFONE, Inc.

A U.S.-domiciled corporation, XFONE, Inc. is an international 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 telephony services; prepaid and postpaid calling cards; cellular services; Internet services; messaging services (Email/Fax Broadcast, Email2Fax and Cyber-Number); and reselling opportunities. The Company serves customers across Europe, Asia, North America, South America, Australia and Africa. For the company's website, please visit: www.xfone.com

This press release contains forward-looking statements. The words or phrases "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 and operational 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 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: 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, 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 U.S. Securities and Exchange Commission.