AG Communication Systems and 8X8 Team Up to Integrate Advanced VoIP Telephony Solutions.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Aug. 17, 1999--

8x8, Inc. (Nasdaq:EGHT), a leading supplier of multimedia communication technology and systems, announced today it is teaming up with AG Communication Systems, a subsidiary of Lucent Technologies, to provide an end-to-end IP Centrex solution.

Together, 8x8's Symphony(TM) VoIP (voice over Internet protocol) gateway and AG Communication Systems' iMerge(TM) Centrex feature gateway (CFG) allow local exchange carriers and business enterprises to construct complete IP telephony systems with full Centrex feature functionality.

Under the agreement, AG Communication Systems will jointly market 8x8's Symphony gateway with its iMerge CFG to service providers and enterprise customers. 8x8 will train the sales and marketing staff at AG Communication Systems and will provide support to AG Communication Systems' customers for the Symphony VoIP gateways. Initial plans call for controlled system trials in the fall, followed by carrier and enterprise testing.

"AG Communication Systems, with its deep understanding of today's circuit-switched network and what it takes to deliver carrier-class quality of service, is an ideal partner for us as we roll out our Symphony customer premises gateways," said Paul Voois, 8x8's chairman and chief executive officer. "Only the close integration of PSTN (public switched telephone network) and IP network technology can ensure the level of functionality, quality and reliability that consumers expect from their telephone systems. Together, we can deliver systems that meet customer expectations at a reasonable price."

"With 8x8's Symphony gateway, iMerge can effectively deliver more than 350 Centrex features into the IP world while allowing end users to employ existing telephone sets," said Ken Arndt, director of marketing for AG Communication Systems' Switching group. "Symphony saves end users a substantial investment and enables enterprises to fully harness the power and efficiencies of IP voice and data transport."

The two companies' gateways serve distinctly different functions in IP telephony networks.

8x8's Symphony customer premises gateway connects four standard analog telephones to an IP network. In concert with AG Communication Systems' iMerge CFG, it provides all of the CLASS and Centrex features consumers are accustomed to, including call waiting, call hold, call forwarding, call transfer, caller ID, three-way calling, etc.

The Symphony gateway supports H.323 and MGCP (media gateway control protocol) for call control and provides a variety of audio codecs (G.711, G.723, G.726 and G.728) to give network operators flexibility in managing network traffic and congestion.

iMerge extends Centrex features on VoIP calls from any Class 5 switch, including Lucent's 5ESS(R), Nortel's DMS-100(R) or AG Communication Systems' GTD-5(R), to IP networks. This allows carriers to offer these high-value features over efficient packet networks and enables new applications, including multilocation Centrex, telecommuting made transparent, seamless communications for the road warrior and virtual call centers.

iMerge reuses the Class 5 infrastructure: hardware, software, interfaces, adjunct platforms and the highly trained staffs that keep that infrastructure humming, allowing carriers a smooth, low-impact transition into packet-based services.

AG Communication Systems, a subsidiary of Lucent Technologies (NYSE:LU), is a leading developer and manufacturer of advanced communication products and services, including switching, access, video, wireless and intelligent network products. AG Communication Systems' GTD-5 digital switching systems serve more than 17 million business, government and residential subscribers. Additional information is available on the company's web site at http://www.agcs.com.

8x8, Inc., is a leading manufacturer of digital telecommunications technology, including IP telephony gateways, software and semiconductors. By leveraging its technology expertise in audio and video compression and communication protocols, the company is providing systems and software to network and telecommunications equipment providers, cable television system operators and local exchange carriers. For more information, visit 8x8's web site at http://www.8x8.com.

This press release contains forward-looking statements. 8x8's actual results may differ materially from the results discussed, implied or forecasted in the forward-looking statements due to factors including in particular a history of losses, uncertainty of future profitability, potential fluctuation in future operating results, dependence on key customers, the uncertainty of market acceptance of IP telephony, the limits of existing IP telephony technology, rapid technological change, compliance with industry standards, dependence on key personnel, dependence on new product introduction, current and potential competition and the need for additional capital. Further information on these and other factors that could affect the actual results of 8x8 are included in 8x8's Report on Form 10-Q for the quarter ended June 30, 1999, which is on file with the Securities and Exchange Commission. 8x8 assumes no obligation to revise or update any forward-looking statements contained in this press release.

Note to Editors: All products and brand names are trademarks or registered trademarks of their respective owners. The 8x8 logo is a registered trademark and Symphony is a trademark of 8x8, Inc. iMerge is a trademark of AG Communication Systems. GTD-5 is a registered trademark used under license from GTE Corporation.