3Com CommWorks IP Telephony Offering Creates New Revenue Sources for Service Providers.

Business Editors/High-Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Jan. 25, 2000

CommWorks(R) Enhanced Services Phase 1 Delivers Retail IP Telephony,

Fax-over-IP and Interactive Voice Response Capabilities

3Com(R) Corporation (Nasdaq:COMS), an industry leader in innovative IP telephony solutions for service providers, today announced the general availability of the newest version of its CommWorks(R) IP telephony platform.

CommWorks Enhanced Services Phase 1 delivers an array of new services, including retail IP telephony applications, fax-over-IP and Interactive Voice Response. These revenue-generating features allow new and existing service providers to easily and cost-effectively differentiate their service offerings and stake out a unique position in the highly competitive voice marketplace. Availability of CommWorks Enhanced Services Phase 1 is scheduled for April 2000.

The CommWorks IP telephony solution is a key element in 3Com's strategy for delivering e-Networks to service providers. (For more details, see today's separate press release: &uot;3Com Announces Strategy for Building e-Networks for Service Providers.&uot;) To become the leading vendor of systems in the emerging market for IP-based enhanced services and infrastructure evolution, 3Com is leveraging its leadership in Internet access systems and its large installed base among many of the world's largest service providers. 3Com is the only vendor offering a full-fledged, standards-based IP environment with open interfaces throughout for delivering enhanced services and building the next-generation of the packet-based infrastructure.

&uot;With its service-creation capabilities and inherent flexibility, our CommWorks solution is at the forefront of IP telephony evolution,&uot; said Irfan Ali, senior vice president and general manager, 3Com Carrier Systems. &uot;3Com gives service providers a clear migration path to follow as they roll out new revenue-generating features and offerings.&uot;

3Com is among the world's top three providers of carrier-class IP telephony equipment. (Source: Cahners In-Stat Group) The company's CommWorks IP telephony solution is currently in trials with some of the world's largest service providers. More than a dozen voice-over-IP and fax-over-IP trials using the CommWorks architecture are now underway in North America, Europe and Asia.

Last September 3Com unveiled a three-phase strategy for bringing new cost-effective, revenue-generating IP telephony features and enhanced services to service provider customers. Today's announcement on product availability delivers on Phase 1 of this strategy.

                 CommWorks Enhanced Services Evolution

----------------------- -------------------- -------------------------
       Phase 1                Phase 2                Phase 3
----------------------- -------------------- -------------------------
     Enhanced Fax       Universal Messaging         One-number
                                                Follow-me Service

Internet Call Waiting         CLASS             Directory Services

  Interactive Voice           Centrex           Voice VPN
      Response

Pre/post-paid Calling        Web-based          Web Conferencing
        Cards                Call Center
----------------------- -------------------- -------------------------

A Broad Range of Customers

CommWorks Enhanced Service Phase 1 can be deployed by a broad spectrum of customers, including retail and wholesale Internet telephony service providers, Internet fax service providers, Internet service providers, competitive local exchange carriers, international exchange carriers, enhanced service providers, and application service providers. Enhanced services available in Phase 1 include:

--   retail IP telephony applications such as pre- and post-paid
     calling card models and alternate access long distance;

--   fax-over-IP, including international long distance fax services
     and fax outsourcing applications;

--   Interactive Voice Response, which uses synthesized voice or
     prerecorded messages to offer callers choices on how they can
     complete the purpose of their call; and

--   Internet call waiting, which allows customers to use a single
     phone line for simultaneous voice and dial-up sessions.

&uot;The convergence of voice, data and video into a packet-switched IP network lowers the entry costs for new service providers and enables them to quickly and cost-effectively introduce new value-added services,&uot; said Houman Modarres, director, Internet telephony product management, 3Com Carrier Systems. &uot;Our CommWorks IP telephony architecture gives service providers the ability to create new revenue streams while maximizing customer retention.&uot;

For example, retail voice-over IP (VoIP) applications could develop into new revenue generating services for an ISP entering the telephony market. With CommWorks Enhanced Services Phase 1, service providers have the flexibility to deploy one or more of several different VoIP models, including pre-paid or post-paid calling, international long distance, and roaming services.

CommWorks Enhanced Services Phase 1 also offers a standardized solution that can easily and immediately 'IP fax-enable' any service provider's point-of-presence (POP) to allow the deployment of enhanced IP fax services. With this solution, service providers can immediately offer their customers such services as PC-to-fax, Web-to-fax, standard fax-to-fax, and fax-to-email.

Many of the fax-over-IP (FoIP) capabilities available in CommWorks Enhanced Services Phase 1 reflect the efficient integration of 3Com's December 1999 acquisition of LANSource Technologies, a leading vendor of FoIP software applications. Through its CommWorks IP telephony solution, 3Com offers a carrier-class, integrated hardware and software solution for FoIP services.

End-user customers who outsource fax services to a service provider can significantly reduce their hardware and maintenance costs, as well as long distance fax charges. For the service provider, enhanced fax services are an additional source of revenue and a key service differentiator in an increasingly competitive marketplace. In an August 1999 report, Dataquest estimated that the worldwide IP fax market will grow to $16.7 billion by 2003.

The Internet call waiting feature enabled by CommWorks Enhanced Services Phase 1 is another potential source of revenue for carriers, who can opt to charge a flat rate or a usage charge for the service. For the customer, Internet call waiting acts as a virtual second phone line, allowing them to maintain their Internet session while answering an incoming call. The voice call can be received via IP telephony without ending the Internet dial-up session. Initially, trials of the Internet call waiting capability are focused in the international market.

Three-Tiered Architecture

The CommWorks IP telephony solution offers standardized and open interfaces, enabling service providers to reduce time-to-market for delivering new, revenue generating enhanced IP telephony services. The openness of the CommWorks architecture also allows 3Com to work with strategic partners who have applications expertise in many areas.

The first two tiers of the three-tiered CommWorks architecture address universal connectivity requirements to enable subscribers to access integrated services over their choice of client devices and access networks. Tier 1 consists of a robust series of media gateways for media processing. The media gateways integrate multiple types of traffic and disparate access networks. Media gateway controllers for signaling and call control reside at Tier 2. The second tier bridges different signaling and call control protocols, enabling traffic to seamlessly traverse different networks. Tier 3 includes a series of back-end servers, creating an open environment for application and service development. Each tier of the CommWorks architecture delivers carrier-class reliability and scalability and is designed to evolve with changing market demands.

About 3Com Corporation

With over 300 million customer connections worldwide, 3Com Corporation connects more people and organizations to information and each other in more innovative, simple and reliable ways than any other networking company. 3Com delivers e-Networking solutions through information access products and network systems to enterprises, small businesses, consumers, and service providers. For further information, visit 3Com's World Wide Web site at www.3com.com or the press site at www.3com.com/pressbox.

Note to Editors: 3Com and CommWorks are registered trademarks of 3Com Corporation.