Aether Systems Announces Wordwide Licensing Agreement Between its European Venture, SILA Communications and Gemplus, the Leading Provider of `Smart Cards'.

Business Editors/Hi-Tech Writers

OWINGS MILLS, Md.--(BUSINESS WIRE)--July 7, 2000

Next generation SIM cards to deliver broadband services

Aether Systems, Inc. (Nasdaq:AETH) announced today that its European venture with Reuters, SILA Communications, has signed a worldwide licensing agreement with Gemplus, the world's No.1 provider of plastic and smart card-based solutions.

SILA, owned 60 percent by Aether and 40 percent by Reuters, is a leading provider of wireless application services for mobile devices in Europe and Asia. The Gemplus agreement means that SILA's decompression software will be embedded in a new Gemplus SIM cards allowing mobile phones in Europe to receive large volumes of information at high speeds and low cost.

Under the agreement, SILA is to incorporate its compression software into the new Gemplus SIM card. The new SIM card will enable users to receive large volumes of data and some broadband services on their hand held devices.

"Up until now, the cost and reliability of existing systems has severely restricted the type and amount of information a user can receive on a mobile device such as a phone," says Bo Kroll, president of SILA. "Our software utilizes significant data compression allowing large amounts of data to be sent across the network in very small packages. The new SIM card from Gemplus decompresses and displays this information for the client. Mobile users will soon be able to receive far more information than ever before."

The Java Card powered SIM card is based on a new chip with an initial capacity of 64K, although this is set to increase significantly over the next few years. The SIM card will support SMS point-to-point and SMS cell broadcast as defined in GSM 11.11 and GSM 11.14. SILA will also assist in testing a prototype series of products utilizing the SILA software and compatible SIM cards this year with "live" data on European GSM networks in the first quarter of next year.

The application was developed in conjunction with Gemplus, using GemXplore CASE, Gemplus' advanced SIM software factory.

Philippe Martineau, Vice President, Next Generation Networks, Gemplus remarks, "We are seeing the SIM card play an increasingly important role in delivering mobile services. It occupies a pivotal position as the secure application platform at the heart of GSM and 3rd Generation mobile phones and, with memory capacity increasing rapidly, the SIM card's value to the operator and to the mobile phone subscriber will continue to rise."

SILA Communications, formed in May 2000 by Aether Systems and Reuters with an initial capitalization of $167 million, is in the process of granting a number of operating licenses to mobile phone Network Operators for the commercial use of the SILA system.

Kroll comments: "This new system brings us closer to our goal of providing high speed wireless access to corporate and financial information, email and secure transaction capabilities. The fact that we are able to offer broadband services over what is currently a narrow band channel, puts Gemplus and SILA ahead of the game. The content provision by Reuters and other content providers will make this a very attractive proposition for mobile operators."

Martineau confirms: "With wireless penetration expected to grow to 72%(1) of the population of Western Europe in 2003, broadband wireless communications is an exciting arena to be in. We are very pleased to partner with SILA Communications given its position as Europe's biggest provider of wireless data for financial markets. Gemplus' leading edge technology will ensure the optimal delivery of data over current networks and over the next generation digital networks being rolled out across Europe."

(1) Figure according to Lehman Brothers 

Notes to editors:

About SILA Communications

Sila Communications, headquartered in London, is a venture between Aether Systems (60% owner) a leading provider of wireless applications and Reuters (40%) the worldwide financial information provider. In the new company, Aether Systems has contributed $15 million cash and its recent $85 million acquisition of IFX Group, Europe's biggest provider of mobile financial data. Reuters has contributed $22 million cash and its wireless applications company Futures Pager, owner of mini-Reuters a professional portable information system. Through IFX and Futures Pagers, Sila has a significant corporate structure in place in Europe and Asia with offices in the UK, Denmark, France, Finland, Germany, Netherlands, Norway, Portugal, Spain, Sweden and Singapore. Sila technology operates over European GSM wireless networks as well as the next generation high-speed networks including GPRS and UMTS.

About GEMPLUS

Gemplus S.A. (www.gemplus.com/wireless) is the world's leading provider of plastic and smart card -based solutions (by units sold, source: Dataquest 1998). Gemplus sells magnetic stripe cards, memory and microprocessor-based smart cards , smart contactless cards, electronic tags and smart objects. The company designs and markets software, development tools and readers. Gemplus also provides consulting, training and personalization services to deliver the industry's most comprehensive and flexible card-based solutions to its developers, distributors, partners, and customers. With sales of over $US817 million in 1999, Gemplus employs almost 6,300 people in 17 manufacturing facilities, 7 R&D centers and 41 sales and marketing offices located in more than 30 countries around the world. Founded in 1988, Gemplus has successfully implemented portable and secure smart card -based solutions to simplify applications such as public and wireless communications, financial transactions, loyalty, transportation, education, healthcare, identity, physical access control, pay TV, electronic commerce, Internet security, logical access control and information technology.