xG Technology Mobile VoIP Unlicensed Spectrum

Q. xG Technology is a relatively small company. How could it come up with a technology that major manufacturers have not been able to develop?
A. Existing cellular companies are understandably committed to supporting legacy technologies that they have spent many years and billions of dollars to bring to market. Unencumbered by the limitations of having to support legacy systems, xG has been able to start fresh and take advantage of newer technologies and solutions. The Company sought the most advanced approaches to solving the specific problem of delivering voice and data services in unlicensed spectrum, and developed its technology from the ground up as an Internet-based, all-digital system. xG also had the benefit of $100 million in financing provided by visionary backers and the support of technology partners in Europe and Asia. By leveraging IP-based networking technology, using off-the-shelf server equipment, open source software standards and cutting edge DSP devices, xG was able to build a very cost effective platform that reduced much of the engineering to a software development effort.

Q. Is xG's xMax only a VoIP technology?
A. Not at all. The technology can be used for any application as it is built on an IP framework. Therefore anything IP-based can also go across an xMax network. xG views the voice application as a stepping stone to more bandwidth-intensive applications like mobile broadband data services and video. xG has designed the technology to be a flexible solution, and xMax can be implemented as a radio modem module into any manufacturer’s handset, CPE (customer premise equipment) or device OS (operating system).

Q. Does xMax offer a path to 4G wireless technology?
A. Yes. xMax will offer substantial benefits in the fourth generation (4G) wireless market, where the constraints of range, interference, spectrum allocation and throughput will be major issues. xMax technology is scalable, and xG plans to enhance its core technology to increase data rates, allowing it to meet the specifications of 4G-compliant wireless systems.

Q. Why did xG Technology choose to operate in the sub-microwave (i.e., below 1 GHz) unlicensed band?
A. In short, lower frequencies have much better RF propagation characteristics. The 900MHz unlicensed band, as an example, offers exceptional non-line of sight penetration and multi-path properties, resulting in better overall range. It should be pointed out that xMax is frequency agnostic and can be deployed at any radio frequency.

Q. Isn’t unlicensed spectrum—which is used by xMax—basically unusable because of interference?
A. The concept of a broadband wireless network operating in the unlicensed band is not a new one. In fact, there are numerous broadband wireless networks, including Wi-Fi, operating successfully in unlicensed spectrum around the world.. The key to designing a robust wireless system is to account for interference in all areas of the system and make reliability a central tenet of the design. xG has done exactly that with xMax. As an example of some of the patented interference mitigation technologies included in the system, xMax actively and pro-actively detects and avoids other signals at a rate of up to 33 times per second. Because xMax is extremely agile in terms of interference avoidance, the system has the ability to share airwaves with existing users. This ability to reuse spectrum is a benefit being actively promoted by government and industry seeking to accommodate greater and greater demands for spectrum, and is a major advantage xMax offers over competing transmission technologies.

Q. Does xMax technology only work in unlicensed spectrum?
A. No. While xMax is currently optimized for the unlicensed ISM 900MHz band, the system is frequency agnostic and will work at any radio frequency and bandwidth. As with any communication system, overall throughput is proportional to the available bandwidth.

Q.How does the technology demonstration given by xG Technology in November 2005 correspond to what xG is doing today?
A. The demonstration in 2005 was held before the Company chose to focus on the mobile VoIP application. In 2005, the Company demonstrated that its technology could transmit 3.7MB of data over 18 miles from an 800 foot tower, using 35 milliwatts of power. Although xG had no base station or end user device to test at that time, it was a very successful demonstration of the viability of the Company’s concept of sending and receiving high rates of data over significant distances at very low power.

The technology employed in that demonstration is the basis for the xMax mobile VoIP network that is currently operating in the Fort Lauderdale area. Using xG-developed base stations and handsets, the network is transmitting from towers as low as 60 ft. in the unlicensed 902-928MHz band. The network has demonstrated excellent QoS (quality of service), fixed low latency, and strong resistance to interference in an urban/suburban environment. This allows the delivery of clear calls without drop-offs, and seamless handoffs between base stations. The xMax network has recorded excellent performance, with signal ranges comparable to traditional cell phone networks – while transmitting at only one watt of power, as opposed to up to 60 watts used by the traditional networks.

Q. Is xMax mobile VoIP suitable for true mobile use such as in fast-moving vehicles?
A. Yes. During field tests conducted in fast-moving vehicles, xG Technology has attained call quality equal to or better than GSM with fewer dropped calls.

Q. Isn’t Skype a mobile VoIP service?
A. No. Mobile means you can walk or drive around while maintaining a call. With Skype this is only true if you are connected to a computer or in the vicinity of a WiFi hot spot. As soon as you move a few feet, your call will drop. WiFi does not support roaming to another hot spot. A much more sophisticated system is required for that.

Q. What about Skype over 3G? Isn’t that mobile VoIP?
A. Not really. There are several problems with using VoIP over a 3G service. While it can be done, it’s not free. You need to have a data plan, which can cost from $30.00 to $80.00 per month. In addition, data services over 3G (or 4G) do not guarantee quality of service. These data services are not designed for the high quality of service necessary for reliable voice calling using VoIP. As a result, no guarantee is given that such use of the 3G network will be reliable. If the cell site is lightly loaded you may be able to make calls. However, there might be loss of service when the call is handed off to another cell site while moving.

Q. How does xMax compare with WiMAX and Wi-Fi at transmitting voice?
A. Unlike the other systems, xMax was built from the physical layer up by xG Technology to support mobile VoIP. xMax can carry 2x more voice calls/MHz than either WiMAX or Wi-Fi. WiMAX was built to carry data service, not voice. WiMAX needs extremely high capacity to support VoIP; it can only have about 16 simultaneous calls, after which jitter and latency problems make it unstable and unable to support any additional calls. To attain the coverage areas attainable with xMax, Wi-Fi networks would require dozens of assess points per square mile. This was a major problem experienced by many Wi-Fi citywide networks that ultimately proved to be unsuccessful.

Q. When will xG Technology launch the xMax service?
A. xG will not be launching an xMax based service itself. xG has developed xMax as a core technology that can be used by others including mobile operators, carriers, content providers, and other service providers. xG is currently talking to potential partners to handle xMax deployments.

Q. Why is xG Technology (a US company) traded on the London Stock Exchange AIM market?
A. Going public on the AIM was a strategic decision by xG Technology. The opportunity to go public in the US was not available at the time as it is virtually impossible for a pre-revenue company to become listed on the NASDAQ. For xG it was also a key benefit to have direct access to European-based investors, who already comprise most of xG’s investors, aside from the Mooers Branton & Company merchant bank and founders.

Q. Why has there been so much controversy about xG and its technology?
A. Most of the controversy has been the result of delays surrounding the release of the technology, and skepticism about the technology itself. Regarding the delays, xG operates in the notoriously complex telecommunications industry, where delays are a common occurrence for virtually all companies, including all the large industry players. Look at the likes of WiMAX and LTE, for instance. xG has made significant accomplishments considering what it has done with less than 100 employees and a fraction of the financing available to those other technologies. xG is proud that its xMax technology is here now, operating in Fort Lauderdale, and available for demonstration. The Company is delivering quality mobile VoIP service in the 900 MHz unlicensed band, something no other leading edge technology can do today.

Regarding the technology itself, xG and xMax have met with controversy typical of all innovation that challenges conventional wisdom – in this case, the notion of deploying high QoS voice and data services in unlicensed spectrum. xG Technology has chosen to blaze a new path in communications technology. The skepticism directed at xG proves that today, just as in the past, new ideas that challenge the established order of things are often criticized by those most interested in protecting the status quo.