Operating Highlights:

• Second quarter 2008 revenues increased 20% from first quarter 2008, well above previous guidance of 15%, and a 53% increase from second quarter 2007
• Customer churn for the second quarter of 2008 was 1.17% representing an improvement of 12% from the first quarter of 2008 and an improvement of 36% from the second quarter of 2007
• Average revenue per user (ARPU) reached $797, an increase of 8% from first quarter 2008 and an increase of 19% from second quarter 2007
• "Cash burn" decreased from $4.7 million in first quarter 2008 to $4.4 million in second quarter 2008
• Gross margin increased to 58% during the second quarter 2008 as compared to 53% in the first quarter 2008

"Our second quarter sequential revenue growth of 20% significantly exceeded our previously stated guidance of 15% for the quarter," said Jeff Thompson, Chief Executive Officer. "These strong results reflect the continued maturation of both our newer markets and our sales force. Over the past 12 months, we have significantly increased the number of account executives and the customer pipelines developed by our expanded sales force is beginning to yield results. Our Internet-based marketing initiatives, and the success of our mid-range product offering of 8 mbps at $999 per month, are also driving sales growth."

"We are well positioned to take advantage of the significant investment made over the past 12 months in our network and in our people," said Joseph Hernon, Chief Financial Officer. "We have strengthened our network capabilities in existing markets and established a strong network presence in our new markets. We have built and trained a sales force which is almost three times larger than a year ago and our newer account executives are beginning to report higher sales volume. With these investments largely completed, and our sales growth accelerating, we believe that our 'cash burn' may have peaked in the first quarter of 2008."

"Recent customer wins include high profile companies such as Intel, Netflix and ESPN -- and our existing customers continue to upgrade to higher bandwidth products, increasing ARPU," added Thompson. "At the same time, churn decreased to 1.17%, reflecting higher levels of customer satisfaction. These positive operating metrics are a clear indication that businesses view Internet connectivity as essential to their operations even during a difficult economic environment."

Towerstream is a leading fixed WiMAX service provider in the U.S., delivering high-speed Internet access to businesses. Founded in 2000, the Company has established networks in nine markets including New York City, Boston, Los Angeles, Chicago, the San Francisco Bay Area, Miami, Seattle, Dallas-Fort Worth, and the greater Providence area where the Company is based. The Company was the first carrier selected to join the WiMAX Forum to assist leading vendors in establishing industry compliance with international broadband wireless access standards and cross-vendor interoperability.

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Keywords: second quarter ended june, network presence, jeff thompson, marketing initiatives, network capabilities, internet based marketing, sequential revenue growth, management comments, hernon, twer, chief executive officer, account executives, Wireless VOIP