Adaptive Broadband Reports Q1 Results: Orders for AB-Access Wireless Broadband Product Boost New Orders Booked to Record $55 Million.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 28, 1999--

Investment in AB-Access(TM) Continues, Strategic Initiatives on Track: Orders Flowing, Initial Shipments Begin, Manufacturing and Integration

Partners Selected, MMDS Prototype Successfully Demonstrated

ADAPTIVE BROADBAND CORPORATION (Nasdaq National Market: ADAP) reported results today for its fiscal year 2000 first quarter, ended September 30, 1999. The company reported a net loss from continuing operations of $3.9 million, or $.26 per share, on revenue of $42.9 million, compared to a loss from continuing operations of $ 3.7 million, or $.24 per share, on revenue of $34.7 million for the first quarter of fiscal 1999. Last year's first quarter results excluded an after tax $7.2 million in-process R&D charge for the acquisition of Adaptive Broadband Limited. New orders booked in this year's first quarter were up 48% over last year's first quarter, to a record $54.8million, including $12.5 million in firm, near-term shippable AB-Access orders. Performance of the company's satellite communications product area, which had experienced weakness in recent quarters, improved significantly in new orders booked, revenue and gross margin. Progress on strategic initiatives related to the company's AB-Access wireless broadband product is highlighted later in this release.

Continuing Investments in R&D, Sales and Marketing

"Adaptive Broadband's ability to demonstrate, here and now, a high speed, fixed wireless broadband product for last mile solutions has been key to our success in winning the confidence of our customers. Through working demonstrations and trials, we have proven to telephone companies, carriers, CLECs, RBOCs and ISPs that we have an attractive wireless networking solution for affordable, high-speed data transport. We are committed to this emerging, wireless broadband market and see it as the driver for our future growth. Therefore, we will continue our investments in research and development, and sales and marketing. This quarter marks the first million dollars of revenue generated through production shipments of the AB-Access product. This quarter also saw an increase in AB-Access bid and proposal activity, with our near-term opportunities growing to the multi-billion-dollar level. We believe there is a pent-up demand for high-speed, wireless Internet access and we are ready to fill that demand," commented Donna S. Birks, Adaptive Broadband's executive vice president and chief financial officer.

AB-Access Infrastructure in Place to Address Emerging Wireless

Broadband Market

"Adaptive Broadband made significant progress in our chosen high-growth market area during the first quarter of our fiscal year 2000. We won our first major orders for commercial application of AB-Access, delivered the first production units, selected our manufacturing and integration partners, received FCC certification, and successfully demonstrated the next key phases of development - an MMDS product and simultaneous transmission of data and voice over Internet Protocol. We have not only kept our commitment made to our shareholders to position the company to be a leader in wireless networking solutions, we have accelerated certain initiatives in response to our customers' needs in a rapidly changing market. Our own infrastructure is in place now, and we're moving aggressively to win our share of what we believe will be a $100 billion worldwide market for wireless data networking equipment," stated Frederick D. Lawrence, chairman and chief executive officer.

The company has partnered with Solectron Corporation (http://www.solectron.com) of Milpitas, CA, to manufacture the AB-Access product line and with Science Applications International Corporation (SAIC) of San Diego, CA, to integrate AB-Access into next-generation networks for large commercial clients and government applications around the world. Solectron has more than 33,000 associates in 23 manufacturing facilities worldwide with more than 7 million square feet of capacity. SAIC (http://www.saic.com) is a Fortune 500 company and the nation's largest employee-owned research and engineering firm.

From 25 Mbps to 100 Mbps in the Year 2000

The AB-Access technology was engineered to work at any frequency from 2 to 42 GHz. The first releases for AB-Access are for applications using the 5 GHz U-NII (Unlicensed-National Information Infrastructure) and 2.5 GHz MMDS (Multi-channel, Multi-point Distribution Service) frequency bands. AB-Access was introduced earlier this year for ultra high speed Internet access. It bridges the last mile, replacing the local loop for business and residential subscribers. AB-Access offers data transmission at rates up to 25 Mbps, a speed more than 400 times faster than dial-up service with a 56K modem. This allows users to transmit voice, download full-streaming video, download data files, use real-time video conferencing and surf the Worldwide Web - all at the same time over a single connection. Adaptive Broadband is working to deliver higher data rates in mid 2000 - from 25 up to 100 megabits per second - which will allow carriers to add more users without compromising their throughput capability. Additionally, the company announced that it is developing a version of AB-Access for the 3.5 GHz market in Europe. A prototype will be tested during the first quarter of 2000.

Early Adopters of AB-Access: Internet Service Providers I3S and

Fuzion and RBOC U S West

As announced in July, Adaptive Broadband won the wireless broadband market's largest single contract of its type from I3S, the Irving, Texas, high-speed data services provider. Under an initial $100 million, five-year contract, AB-Access will be used by I3S (http://www.I3S.com) to provide broadband Internet access to multi-tenant residential buildings nationwide. In September, Adaptive Broadband announced receipt of an initial $20 million, three-year contract from Fuzion Technologies (http://gofusion.com) of Boca Raton, FL, to supply AB-Access to business users of the Internet. This month, Adaptive Broadband announced a master purchase agreement with U S West (http://www.uswest.com) that enables the Denver-based Regional Bell Operating Company and its affiliates to purchase AB-Access equipment. U S WEST provides a full range of telecommunications services -- including wireline, wireless PCS, data networking, directory and information services -- to more than 25 million customers nationally and in 14 Western and Midwestern states.

Development Milestones: MMDS Prototype and Voice-Over-ATM with

Jetstream Communications

In response to customer requests, Adaptive Broadband accelerated its development of an MMDS product and announced in October that it had successfully demonstrated a working prototype of AB-Access in the regulated MMDS frequency band, between 2.5 and 2.7 GHz. The prototype operates with both QPSK and 16 QAM modulation in a 6-MHz channel, providing data throughput of up to 16.7 Mbps. Production units will be available in the first quarter of 2000 that will support 64 QAM modulation and a throughput of 25 Mbps. Leading carriers such as Sprint and MCI Worldcom have acquired major holdings in the MMDS spectrum. AB-Access products deployed in the MMDS spectrum will provide line-of-sight transmission at distances of up to 35 miles.

Adaptive Broadband also announced in October a partnership with Jetstream Communications (http://jetstream.com) of Los Gatos, CA, to co-market a solution that will allow service providers to quickly and cost-effectively deliver integrated voice and data services over wireless ATM (asynchronous transfer mode) connections to small and medium-size businesses. The solution combines AB-Access equipment with Jetstream's CPX-1000 Voice Gateway and Integrated Access Devices (IADs). By leveraging ATM, which was designed for the integration of voice and data services, the solution is capable of delivering local telephone service with voice quality comparable to traditional wireline service.

$33 Million Convertible Debt Converted into 1.2 million Shares of

New Stock

Following the close of the quarter, Adaptive Broadband received a number of conversions of its 5-1/4% convertible subordinated notes into common stock. Of the $57.5 million total face value of the notes, approximately $33 million has been converted into approximately 1.2 million shares of new stock.

Adaptive Broadband (http://www.adaptivebroadband.com) is a data networking solutions company -- a leading supplier of terrestrial wireless and satellite-based systems to support ultra-high speed Internet access, broadcast digital TV transport and worldwide Internet backbones. The company also provides industry-leading solutions for satellite-based data communications and terrestrial wireless telemetry networks.

The foregoing includes forward-looking statements, such as the company's potential success in capturing market share, that involve risks and uncertainties. Actual events or results may differ materially from those suggested by the forward-looking statement. Factors that could cause actual events or results to differ materially include, but are not limited to, fluctuations in quarterly results, delays in receipt of orders or in the shipment of products, dependence on evolving telecommunications and Internet markets and success in implementing the company's strategic plan. For a more detailed discussion of these and other factors, see "Risk Factors" contained in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 1999.

-0-

                    ADAPTIVE BROADBAND CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share data)

                                                  Three Months Ended
                                                     September 30,
                                                  1999          1998

Revenue                                        $ 42,935      $ 34,731
Costs of revenue                                 27,331        23,086

Gross margin                                     15,604        11,645

Expenses:
Research and development                          6,659         5,434
Sales, marketing and administration              14,081        10,725
Amortization of intangible assets                   552           395
Purchased in-process
 research and development                          --           8,210

     Total expenses                              21,292        24,764


Operating loss                                   (5,688)      (13,119)
Interest expense, net                              (348)         (872)


Loss from continuing
 operations before income taxes                  (6,036)      (13,991)
Benefit from income taxes                        (2,173)       (3,065)

Loss from continuing operations                  (3,863)      (10,926)

Discontinued operations:
Income from discontinued
 operations, net of income taxes                   --           1,075

                                               $   --        $  1,075


Net loss                                       $ (3,863)     $ (9,851)


Basic and diluted
 earnings (loss) per share:
Loss from continuing operations                $  (0.26)     $  (0.72)
Income from discontinued operations            $   --        $   0.07

Net Loss                                       $  (0.26)     $  (0.65)


Weighted average
 shares used in computing basic
 and dilutive earnings (loss) per share          14,719        15,115


                    ADAPTIVE BROADBAND CORPORATION
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                        (Dollars in thousands)

                                                Sept. 30,     June 30,
                                                   1999         1999
Assets
Current assets:
Cash and cash equivalent                       $  31,673    $  48,887
Accounts receivables, net                         39,580       33,980
Inventories                                       23,441       22,339
Deferred income taxes                             20,271       14,293
Prepaid expenses and other current assets          4,069        4,150

Total current assets                             119,034      123,649


Property, plant and equipment, net                21,624       20,746
Deferred income taxes                               --          3,805
Intangible assets, net                            31,504       32,055
Other assets                                       5,498        6,221
                                               ---------    ---------
                                               $ 177,660    $ 186,476


Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                               $  11,365    $  13,089
Accrued liabilities                               24,900       26,546
Current portion of long-term debt                     43        1,972

Total current liabilities                         36,308       41,607


Long-term liabilities:
Long-term debt                                       326          786
Convertible subordinated notes                    57,500       57,500
Other long-term liabilities                          850        1,590

Shareholders' equity:
Common  stock                                      1,663        1,663
Capital in excess of par value                    95,673       95,673
Treasury stock                                   (32,727)     (36,066)
Retained earnings                                 18,067       23,723

Total shareholders' equity                        82,676       84,993
                                               ---------    ---------
                                               $ 177,660    $ 186,476


                    ADAPTIVE BROADBAND CORPORATION
                          SEGMENT INFORMATION
                         (Dollars in millions)

                          Fiscal 2000                   Fiscal 1999
                               Q1                            Q1


BOOKINGS
Satellite                  $ 22.3                        $ 18.0
Terrestrial                  32.5                          19.2

 Total                     $ 54.8                        $ 37.2

BOOKINGS  MIX
International                 23%                           43%
Domestic                      77%                           57%

 Total                       100%                          100%

BOOK-TO-BILL
Satellite                     99%                          111%
Terrestrial                  159%                          104%

 Total                       128%                          107%

BACKLOG
Satellite                  $ 17.2                        $ 15.2
Terrestrial (1)              31.1                          13.2

 Total                     $ 48.3                        $ 28.4

REVENUE
Satellite                  $ 22.5                        $ 16.2
Terrestrial                  20.4                          18.5

 Total                     $ 42.9                        $ 34.7

REVENUE MIX
International                 34%                           45%
Domestic                      66%                           55%

 Total                       100%                          100%


GROSS MARGIN PERCENTAGE
 Total                        36%                           34%

(1)  Terrestrial includes backlog reduction of $1.0 million related to
     canceled orders from previous quarters.