SALT LAKE CITY (BUSINESS WIRE)

Fonix to Gain Northeast Presence and Expanded Customer Base with Addition of New York-based Telecom Provider

Fonix(R) Corp. (OTC BB: FNIX), a communications and technology company providing integrated telecommunications services and value-added speech technologies, has signed a definitive agreement to acquire Empire One Telecommunications Inc. («Empire»), a privately held company based in Brooklyn, N. Y. Empire provides facility-based local and long distance phone services and Internet services to business and residential customers. Fonix anticipates that it will close the purchase by Dec. 31, 2004.

Fonix will acquire Empire through a merger transaction for total consideration valued at less than $5 million payable part in cash and part in restricted Fonix common stock. For the trailing 12-month period, Empire had revenues of approximately $8 million. With the addition of Empire, Fonix telecommunications operations is expected to report consolidated revenues of $25 million in 2005.

«The acquisition of Empire One Telecommunications enhances and expands our customer base, geographic reach and service capabilities,» said Thomas A. Murdock, Fonix president and CEO. «This transaction represents an important follow-up to this year’s LecStar acquisition and an acceleration of our strategy to consolidate regional exchanges’ customer bases to create cross-selling opportunities and improve efficiencies through integration. Empire’s strength lies in its facility-based network, which will allow Fonix Telecom companies to leverage low-cost routing of telecom traffic, an enormous advantage in the competitive telecom market.»

«Empire is pleased to join Fonix and its telecom operating subsidiary, Fonix Telecom Inc., and we are excited about the added benefits and services that this transaction makes available to our customers,» said Paul Butler, Empire One Telecommunications COO. «Empire’s facility-based network provides a tremendous advantage to Fonix Telecom, as it can be quickly incorporated into its service offering and the company will immediately realize the benefits of the resulting efficiencies. Customers will continue to receive the same high level of service and support. We expect to realize improved operating margins as we consolidate various functions with Fonix Telecom.»

The closing of the merger is subject to various conditions, including approval of certain federal and state regulatory agencies. There can be no assurance that such conditions will be satisfied or that the closing will occur within the time period presently contemplated by the parties.

About Empire One Telecommunications Inc.

Based in Brooklyn, N.Y., Empire One Telecommunications Inc. provides facility-based and resold local and long distance service and Internet services to customers in 16 states and the District of Columbia. Using state-of-the-art technology and providing superior customer service has helped Empire One Telecommunications become one of the fastest growing communications service providers in the United States. For more information, please visit www.eot.net.

About Fonix Telecom Inc.

Fonix Telecom Inc. is the Atlanta-based subsidiary of Fonix Corp., providing services in the Southeast region as LecStar Telecom Inc. (www.lecstar.com). Fonix Telecom provides a full array of wireline voice, data, long distance and Internet telephone services using traditional lines as well as next-generation networks such as Voice over Internet Protocol (VoIP), Broadband over Power Lines (BPL) and fixed wireless technology communications services to businesses and consumers.

About Fonix

Fonix Corp. is an innovative communications and technology company that provides integrated telecommunications services and value-added speech technologies through Fonix Telecom Inc. and The Fonix Speech Group. Visit www.fonix.com for more information, or call 801–553–6600 and say «Sales.»

Statements released by Fonix that are not purely historical are forward looking within the meaning of the «Safe Harbor» provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the company’s expectations, hopes, intentions and strategies for the future. Investors are cautioned that forward-looking statements involve risk and uncertainties that may affect the company’s business prospects and performance. The company’s actual results could differ materially from those in such forward-looking statements. Risk factors include general economic, competitive, governmental and technological factors as discussed in the company’s filings with the SEC on Forms 10-K, 10-Q and 8-K. The company does not undertake any responsibility to update the forward-looking statements contained in this release.