March 28, 2008

JACKSON, MS –March 31, 2007 – XFONE, Inc. (AMEX and TASE: XFN) (“XFONE” or “the Company”), a multinational communications services company with operations in the US, the UK and Israel, announced audited consolidated financial statements for the year ended December 31, 2007 and pro forma unaudited combined results of Xfone and NTS Communications, Inc. (“NTS”), which Xfone acquired on February 26, 2008, as if the acquisition had occurred on January 1, 2007.

Pro forma revenue for the year was $111.2 million. Pro forma adjusted 2007 EBITDA (earnings before interest, taxes, depreciation and amortization) which excludes a $2.9 million non-recurring loss related to the MCI Worldcom legal case, was $12 million. Pro forma net income, excluding the non-recurring charge of $2.9 million, was $5.6 million, or $0.30 per share assuming 18.4 million fully diluted shares outstanding through 2007. Actual pro forma net earnings for the year was $3.6 million, or $0.19 per share based on 18.4 million fully diluted shares outstanding through 2007.

Guy Nissenson, President and CEO of XFONE, stated, “2007 was an exciting and transformative year for our company. Concurrent with 18% stand alone growth, we focused on closing the acquisition of NTS which was consummated in February of 2008. The addition of NTS dramatically increases XFONE’s scale, reach and service offerings in the United States. Notably, NTS has invested $23 million in developing a Fiber-to-the-Premise (FTTP) platform which enables unique economies and facilitates a voice, data and cable ‘triple play’ offering for customers. The combined Company expects to drive future growth and profits through innovative service offerings such as the ‘triple play’ and by leveraging its existing operating synergies. The magnitude of this acquisition is reflected in the strong pro forma earnings. Furthermore, the integration process is underway and we look forward to driving additional synergies in 2008.”

Audited revenues for the year ended December 31, 2007, not including NTS, increased 18% to $44,723,934 from $37,971,037. As the result of the one-time non-recurring $2.9 million expense the company reported a net loss of $1.3 million, or $0.11 per share based on 11,779,390 weighted average fully diluted shares outstanding. Net income for 2006 was $660,696, or $0.06 per share based on 10,135,874 weighted average fully diluted shares outstanding.

Mr. Nissenson noted, "Our results in the UK decreased in the later part of 2007 due to an increase in the cost which customers calling our international services from a mobile phone have to pay, as levied by the mobile operator. This made one of our products no longer cost effective. As a result, our team in the UK mobilized quickly to offer customers an alternative product which gives them the opportunity to buy credit for international calls through premium rate text. This has been successful in terms of migrating customers, and total monthly minutes switched have since stabilized and are increasing as we head into 2008."

Mr. Nissenson concluded, “In the first quarter of 2008 we announced the signing of an Agreement of Principles for the acquisition of majority interest of Tadiran Telecom Communications Services in Israel. Tadiran, with annualized revenue of approximately $24 million based on unaudited financial reports for the period ended September 30, 2007, brings an installed customer base of medium to large size businesses in Israel which we intend to use as a gateway to the local telecom market in Israel. Additionally, we announced the purchase of the remaining shares of Story Telecom, providing us with 100% ownership of that subsidiary. Moving forward, we expect these developments, coupled with the successful integration of NTS, to provide a positive impact on our earnings.”

The audited financial information and unaudited pro forma financial information above should be read in conjunction with the historical financial statements of Xfone for the year ended December 31, 2007, which was filed with the Company’s Annual Report on Form 10-KSB with the U.S. Securities and Exchange Commission today, and in conjunction with the historical financial statements of NTS and pro forma financial statements of Xfone, which will be included in a Current Report on Form 8-K/A and filed with the SEC within 30 days.

The unaudited pro forma consolidated financial information presented herein does not purport to represent what Xfone’s actual results of operations would have been had the acquisition of NTS occurred on January 1, 2007, or to project Xfone’s results of operations for any future period.

Conference Call:
The Company will host a conference call on Wednesday, April 2 at 2:00 p.m. Eastern Time to discuss the financial results. The conference call may be accessed in the U.S. and Canada by dialing toll- free 1-877-407-8033. International callers may access the call by dialing 1-201-689-8033.

A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing 1-877-660-6853 and international callers may dial 1-201-612-7415. Callers must enter account number 286 and conference number 280251.

To access the live webcast, log onto the XFONE website at http://www.xfone.com. The webcast can also be accessed at http://www.InvestorCalendar.com. An online replay will be available shortly after the call.

Proforma Balance Sheets | Proforma Statement of Operations | Statement of Operations