interWAVE Signs $4.4 Million Contract With FSM Telecom Corp. to Deploy First Wireless Voice and Data Network for Micronesia Islands

MENLO PARK, Calif.--(BUSINESS WIRE)--Feb. 26, 2002-- interWAVE's Solution Greatly Enhances Existing Communications Infrastructure By Providing GSM Cellular Services With SMS, GPRS And Roaming Capabilities

interWAVE(R) Communications (Nasdaq:IWAV), a pioneer in compact wireless voice communications systems and broadband wireless data networks, today announced a $4.4 million contract from FSM Telecommunications Corporation to provide and deploy GSM-based cellular and broadband access network equipment throughout the Federated States of Micronesia (FSM). FSM Telecommunications Corporation, the national communications operator, provides all telecommunication services for the FSM, which consists of 607 individual islands stretching 1,700 miles across the western Pacific Ocean. The initial deployment will provide integrated cellular and broadband networks in Pohnpei, Chuuk, Yap, and Kosrae, with Pohnpei serving as a centralized management and administrative center.

"Deploying the first wireless communications solution throughout Federated States of Micronesia demonstrates the flexibility, robust nature and high capacity of both of our GSM and broadband solutions," said Priscilla Lu, chairman and CEO of interWAVE. "Being able to provide and deploy affordable cellular and broadband communication infrastructures to areas of the world where terrain, climate or distance represents a challenge is one of our greatest strengths. Most importantly, our solution will provide basic communications capabilities to those that have gone without, furthering our vision of `reaching the unreached."

The flexibility of interWAVE's GSM and broadband solutions enables the deployment of a cost-effective switch and wireless transport for the islands. Communications infrastructure equipment including base stations, switches and radios are installed on each island, providing instant localized communications capabilities. Connected together by broadband links, the system delivers total coverage between all of the islands, as well as efficient routing of long distance voice traffic. For example, using an IP backbone, the number of satellite hops between islands will be reduced thus improving call quality and minimizing costs for other services such as voice mail and Short Message Service (SMS). Further, localized switching, made possible by interWAVE's patented PALIM(TM) switching technology, will increase network performance and quality of service while decreasing network congestion, call interference and expensive backhaul costs typically associated with transporting cellular traffic.

"The economic viability and scalability of interWAVE's solution were two of the key reasons we chose their solution to expand our business," said Takuro Akinaga, CEO of FSM Telecommunications. "We have rebuilt FSM's domestic PSTN infrastructure enabling thousands of families and businesses in populated areas to receive improved and first-time service, yet this is only the first step as there are many remote communities with limited or no communications capabilities. With interWAVE's complete wireless cellular and broadband solution, we are able to increase our service offering to support not only mobile voice services, but also SMS, data through GPRS and roaming capabilities. We believe that an expanded telecommunications network will create new markets, new business opportunities and make the FSM a better and safer place in which to live."

FSM islands are scattered over 1 million square miles, yet total land area is only 271 square miles. Great distances between islands and their isolated location in the Pacific Ocean coupled with mountainous terrain and dense jungle add to the difficulties in deploying cost-effective national communications infrastructure.

"The flexibility and modular components of interWAVE's wireless network solutions were two of the main reasons we were intrigued with their solution," said Dr. Paul Carter, president of Global Wireless Solutions (GWS), a company retained by FSM to review network solutions for their unique situation. "Additionally, interWAVE has a definitive 2.5G (GPRS) and 3G technology path in place, which is important to our clients as they continue to evolve their services to meet the ever growing technology demands."

FSM Telecommunication's future plans include expansion to FSM's remote outer islands where roughly 21 percent of the population currently live and are without telephone services.

About interWAVE Communications

interWAVE Communications International, Ltd. (Nasdaq:IWAV) is a global provider of compact network solutions and services that offer the most innovative, cost-effective and scalable network allowing operators to "reach the unreached." Our solutions provide economical, distributed networks that minimize capital expenditure while accelerating customers' revenue generation. interWAVE's solutions feature a product suite for the rapid and simple deployment of end-to-end compact cellular systems and broadband wireless data networks that deliver scalable IP, ATM broadband networks. interWAVE's highly portable mobile, cellular networks and broadband wireless solutions provide vital and reliable wireless communications capabilities for customers in over 50 countries. interWAVE's U.S. subsidiary is headquartered at 312 Constitution Drive, Menlo Park, Calif., and can be contacted at www.iwv.com or at 650/838-2000.

About FSM Telecom Corporation

FSM Telecommunications Corporation is the national communications operator for the Federated States of Micronesia. Services include domestic and international voice, data, and Internet services. FSM Telecommunications Corporation's vision is to provide cost-effective telecommunication solutions that meet the needs of their customers, results in furthering universal service objectives, and ensures that the country is engaged in today's information and digital age. Further information about FSM Telecommunications Corporation can be found on their Web site at http://www.telecom.fm/telecom.htm or by contacting them at customerservice@telecom.fm.

About Global Wireless Solutions

Global Wireless Solutions, Inc., headquartered in Chantilly, Va., is an industry leading wireless engineering solutions company. GWS provides leading edge, high-quality engineering services, comprehensive project management services and related products to the wireless industry. GWS has provided its services to some of the largest cellular and PCS wireless carriers and equipment manufacturers worldwide. From RF network planning, implementation and optimization to system benchmarking, GWS is unique in its ability to offer its customers a full suite of turnkey engineering and business services geared toward providing tailored and complete solutions. GWS can be contacted at www.gwsolutions.com or at 703/961-8999.

This news release contains forward-looking statements that are subject to known and unknown risks and uncertainties that could cause the results of interWAVE Communications International, Ltd. to differ materially from management's current expectations. These risks and uncertainties include, but are not limited to, the risks relating to interWAVE's history of losses, the expectation of future losses, reliance on a small number of customers, complexity of products, difficulties in introducing new or enhanced products, compliance with regulations and evolving industry standards, long sales cycles, intense competition, management of global operations, the ability to retain and motivate key employees, and acquisition related risk factors including potential for profit acceleration, dilution of shares outstanding, increases in debt absorbed and potential post-acquisition employee retention, as well as the Risk Factors discussed in the filings and reports made from time to time by interWAVE with the Securities and Exchange Commission. interWAVE assumes no obligation to update any forward-looking statements, which speak only as of their respective dates.