ADVA AG Optical Networking to Acquire Cellware Broadband GmbH.

Business Editors & High Tech Writers

MARTINSRIED and MUNICH, Germany--(BUSINESS WIRE)--Feb. 29, 2000

Optical Integrated Access Devices Will Enable Enterprise and Carrier

Users of ADVA's FSP-I to Better Utilize Optical Wavelengths

ADVA AG Optical Networking (Neuer Markt:ADV) today announced the signing of a definitive agreement to acquire Cellware Broadband GmbH, a leading privately-held, Berlin-based designer and developer of integrated access devices. This acquisition strengthens ADVA's leadership position in the enterprise and metro access optical networking space by enhancing ADVA's capabilities to offer an optical integrated access device (OIAD). It brings the company in-depth knowledge about products that offer solutions for integrating high bit-rate services, legacy traffic and network management software.

Under the terms of the agreement, the acquisition will be made at a total purchase price of approximately 23.4 million Euro ($22.9 million U.S.). The purchase price will be paid in shares of common stock in ADVA and 0.4 million Euro ($392,000 U.S.) in cash. This acquisition is subject to various closing conditions, including approval of the acquisition by ADVA's Supervisory Board. A closing in the second quarter of 2000 is anticipated.

"By incorporating Cellware's technology into our Fiber Service Platform-I (FSP-I) platform, we evolve our Optical Termination Unit into an OIAD. This allows us to offer carriers a platform that covers legacy, Internet Protocol (IP), Asynchronous Transfer Mode (ATM), and wavelength services all in one box," said Brian L. Protiva, ADVA's chief strategy officer. "The strong team of engineers, specifically with their software expertise, will also enable us to introduce further networking software releases more quickly. This group of engineers has hundreds of man-years of development experience in next-generation networks -- from which ADVA will derive great benefit."

Cellware's products and technologies incorporate the advantages of a low-cost IAD, defining guaranteed Quality of Service (QoS) parameters, assigning appropriate service classes, multiplexing legacy applications such as voice, video data transmission. The fundamental requirements for broadband transmission are augmented by management applications such as Simple Network Management Protocol (SNMP) and Common Object Request Broker Architecture (CORBA), signaling capabilities (UNI 3.1/4.0) and encryption technology.

"Our FSP solutions now support more than 8,000 installed channels, so the business case for wavelength services in the metropolitan area is proven. The value proposition for this service, however, generally starts with optical services at 100Mbps and higher," said Brian McCann, president of ADVA Optical Networking, Inc. "The new OIAD we gain from the Cellware acquisition will allow carriers to aggregate much lower speed applications onto common wavelengths to better utilize the wavelength network -- or transport the services over broadband IP or ATM networks. The integration of Cellware's products with our portfolio is another example of our focussed, building-block solution strategy. The OIAD perfectly complements our FSP products and can be implemented where the opportunity for services and return on investment are clear."

About ADVA AG Optical Networking

ADVA AG Optical Networking is a global leader in optical networking. Since its foundation in 1994, ADVA has specialized in the design, development and delivery of cost-effective optical networking solutions. Its products are implemented in both private and public networks, including Data Centers, Storage Area Networks (SAN), and Metropolitan Area Networks (MAN) for fiber-based data services to the enterprise. Products and services are distributed via a global network of strategic business partners. The company currently has an installed base of more than 200 service providers and private enterprise customers. ADVA is headquartered in Munich, Germany, with a production and R&D facility in Meiningen and sales offices in Bristol, United Kingdom; Paris, France; Ramsey, New Jersey, USA; and Tokyo, Japan. Visit www.advaoptical.com for more information about ADVA Optical Networking.

About Cellware Broadband GmbH

Cellware Broadband GmbH specializes in developing integrated access devices that connect existing enterprise equipment to the public network. Cellware's product range includes multi-service access multiplexers, signaling and network management software. Cellware products are giving carriers and Internet service providers the ability to enhance their service offerings, and consequently, their revenues. End-users of Cellware products are telecommunications carriers, major multinational companies, broadcasters, governments, universities, and hospitals. Cellware serves the global marketplace through value-added resellers, system integrators, a network of distribution partners, OEM relationships and online sales. More information about Cellware can be found on its website at www.cellware.de.

The statements contained in this press release that are not purely historical are forward-looking statements. Such forward-looking statements include, but are not limited to, the statements regarding the likelihood of the closing of the acquisition of Cellware Broadband GmbH. Such forward-looking statements involve risks that could cause actual results to differ significantly from anticipated results. Risks that could cause actual results to differ significantly from such forward-looking statements include, but are not limited to, those contained in the international offering circular released at the time of ADVA AG Optical Networking's initial public offering on March 29, 1999.

Published by ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany.