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WebSky Plans Development and Improvements to Operations in Peru

WebSky and Digital Way to Launch Next Generation, WiMax System

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 4, 2004--WebSky, Inc. (OTC: WBSK) a developer and operator of wireless broadband systems, today announced that in collaboration with Digital Way, S.A. de C.V. preparations are underway to begin the rollout of a next generation WiMax system in the city of Lima, Peru.
The WiMax system that WebSky has agreed to launch will be constructed by the Company for service over licensed frequencies held by Digital Way and represent a quantum leap from currently available wireline or wireless systems. This system will enable the wireless transmission of data, voice, and video over the Internet to be transmitted to any subscriber within the service area regardless of whether the receiving modem has a direct view of the transmitter.

WebSky, which currently has a definitive agreement in place to purchase a majority interest in Digital Way, will construct a parallel, WiMax, Non-Line-of-Sight (NLOS) system piggybacked upon the current Line-of-Sight system in Lima. It is expected that, over time, the majority of Digital Way's 4,000 Internet connections will migrate to this more flexible and advanced system.

Currently Digital Way, which is licensed by the Peruvian government to provide wireless broadband services throughout the country, is operating only in the greater Lima area. During a recent visit to Peru, President and Chief Executive Officer Douglas Haffer and other members of the WebSky/Digital Way team studied the current high-speed wireless Line-of-Sight system that Digital Way has successfully operated for nearly four years. Additionally, management examined several cities in Peru where broadband Internet service is virtually nonexistent. It was determined that Cusco, a prosperous historical and tourist city, will be the first market to be developed and constructed outside of the Lima area. Peru currently has approximately 3.3 million Internet users, the majority residing in metropolitan Lima. The Peruvian market is an attractive broadband service market due to the rapid growth of Internet users, estimated at 18% annually, and the limited availability of broadband services outside the capital.

Douglas Haffer, President and Chief Executive Officer of WebSky, commented, "Digital Way's excellent and experienced technical and marketing team, together with WebSky's deployment of a next generation wireless system in Lima and other cities, is poised to quickly enhance revenues and expand our existing customer base. As in most emerging nations, the construction of a wireline broadband system would be prohibitively expensive in areas outside the densely populated parts of Lima. WebSky's wireless broadband service, with its relatively low capital expenditure requirements, has the potential to fill this unmet demand and provide world class IT solutions to this underserved Peruvian market."

About WebSky

WebSky, Inc. is a San Francisco based company that develops and operates high speed, broadband wireless Internet ("WiMax") solutions. The company holds lease rights for MDS licensed radio frequencies in seven small and medium sized U.S. markets and more recently has moved into the international market. The Company's system will provide service to its subscribers on licensed frequencies, free from any real or potential interference. To enter the international market, WebSky has signed preliminary agreements with licensee holders in Argentina, Thailand, and recently announced a definitive joint venture agreement with World Wide Wireless (India). The Company has entered into a definitive agreement to acquire a majority interest in Digital Way, a wireless broadband operation in Peru. In each of the locations where it is currently licensed to provide such services, and in the prospective locations it is considering, the Company will be the first provider of such services.

Safe Harbor Statement under the Private Securities Litigation Reform Action of 1995:

The statements contained in this release, which are not historical, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Those risks and uncertainties include, but are not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies and products, delays in testing and evaluation of products, and other risks associated with the industry in which the Company operates.

Contacts


For WebSky, Inc.
FOCUS Partners LLC
David Zazoff, 212-752-9445
PWRM@FocusPartners.com

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