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WebSky, Inc. to Enter Into Definitive Joint Venture Agreement for Broadband Wireless Internet ("Wimax") Project in Argentina

WebSky, Inc. announced today that it will enter into a definitive agreement with Infotel Wireless, a Buenos Aires-based telecommunications company, to establish a joint venture to provide Next Generation wireless broadband service in the Buenos Aires Metropolitan Area (referred to as "AMBA"). The parties expect to execute the agreement within the next ten days. The parties further announced today that discussions between them and other parties for an expansion of the initial project to all of Argentina as well as two neighboring countries are progressing well.

Under the terms of the agreement, a Joint Venture to be known as WebSky Argentina, S.A. will be established to provide non-line-of-sight wireless broadband internet services over licensed frequencies covering a radius of 180 kilometers (112.5 miles) from the center of Buenos Aires. The venture plans to construct the project using Next Wireless' advanced non-line-of-sight equipment which allows for fixed, portable, and even mobile connectivity within the service areas. The system will be fully compatible with, and adaptable to, new chipsets and related hardware currently being developed for advanced wireless broadband services by companies such as Intel.

Over 16 million people live within the licensed-frequency area covered by the joint agreement, and the region contains the majority of the business, educational, and governmental installations of the country. Recent independent reviews of Argentina's economy and telecommunications section have shown a strong rebound from the crisis of 2001-2002. The same objective studies have projected an annual growth rate of 20% for broadband connectivity in the country. All indicators for Argentina show that the most rapid growth in the telecommunications market there will be in the wireless sectors. Currently, all broadband connections are through wireline providers -- either DSL or cable modem -- and it is projected that the greater flexibility of a wireless service will compete favorably with those older technologies. The NextNet Wireless system, which allows wireless connectivity using a portable, battery powered, light weight modem, provides connection speeds comparable to the fixed broadband providers.

Based on projected market penetration rates and growth in the broadband sector in Argentina, the joint venture anticipates net revenues of up to $50 million per year in AMBA by the third year of the project. The relatively low capital expenditures required to construct such a system -- as compared to wireline systems offering similar speeds and capacity -- will facilitate the venture's ability to engage in price competition while maintaining high profit margins.

WebSky further noted the launch, late last month, of Clearwire's wireless broadband internet service in Jacksonville, Florida. Using similar frequencies as those of WebSky's Argentina joint venture, and deploying NextNet Wireless equipment, the Jacksonville project's expected success should be a harbinger of an increasing number of deployments of non-line-of-sight wireless broadband systems over the coming months. One intriguing aspect of Clearwire's Jacksonville project is the ability of individuals in that city to check-out a portable modem from the city library, much as they would check-out a book. That service is the ultimate evidence of the ease of the plug-and-play connectivity of the NextNet Wireless equipment, as well as its ubiquitous coverage in the service area. Those same ease-of-use features will be part of the WebSky Argentina service as well.

Clearwire, which is owned by telecommunications pioneer Craig McCaw, selected Jacksonville for the first major-city deployment of the Next Generation non-line-of-sight systems in the United States, although earlier international deployments in such places as Mexico City have already demonstrated the viability of such systems in larger cities.

About WebSky, Inc

WebSky, Inc. is a San Francisco based company that currently controls licensed radio frequencies in the MMDS-band -- 2.5GHz to 2.7GHz -- in seven small and medium sized cities in the United States in Key West, Florida; Ukiah, California; Las Crosse, Wisconsin; Grand Rapids, Michigan; Hilo, Hawaii; Aspen, Colorado; and Vail Colorado. The Company will be constructing high speed, wireless broadband Internet systems. In each of the locations where it is currently licensed to provide such services, and in prospective locations it is considering, the Company will be the first provider of such services to subscribers. In addition, WebSky has entered into agreements with local telecommunications companies in India, Thailand, Indonesia, Peru, and Argentina to develop wireless broadband systems in those countries.