Amati Communications and NEC Corp. Announce Agreement to Develop Technology and Products for VDSL Services Agreement Covers Technology to Provide up to 60 Mbps of Data and Video Over Copper Wire to the Home and Business.

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 11, 1996--Amati Communications Corp. (NASDAQ:AMTX), a leading developer of advanced transmission equipment utilizing Discrete Multi-Tone (DMT) technology for the Asymmetric Digital Subscriber Line (ADSL), and NEC Corp. today announced a joint development, manufacturing and technology exchange agreement.

The agreement addresses the development and manufacture of components and products based on the Amati Very High-Speed Digital Subscriber Line (VDSL) technology and covers the design of VDSL components, development of VDSL interface products, and the manufacture of products in the future.

"This agreement with NEC is important to Amati for several reasons.," said Jim Steenbergen, president and CEO, Amati Communications. "First, it permits Amati to closely work with a major supplier in the integrated circuit (IC) and the telephone equipment markets. It further validates the Amati DMT technology as the best solution for the high-speed transmissions over copper wire.

"And, it creates the potential for product revenues from VDSL based systems developed under the Agreement. We believe the VDSL market will prove to be even larger than the ADSL market and we anticipate initial shipment of products under the Agreement before the end of 1997."

Amati and NEC will jointly develop the VDSL transceiver LSI using Amati's DMT technology and NEC's advanced silicon fabrication facility. NEC makes available to the joint effort the resources of one of the world's largest semiconductor producers. Amati will, as part of the agreement, also provide software development needed to implement the patented DMT technology using these new NEC IC's.

Products based on NEC's IC's are expected to be part of high-speed fiber and copper transmission systems that bring data and information services within reach of millions of telephone subscribers.

The VDSL products developed under the agreement will also utilize a high speed analog interface design provided by Amati. The parties believe the NEC/Amati collaboration will result in the first commercially available systems capable of such high speed applications over copper loops due to the highly advanced NEC IC production facilities and the Amati expertise in VDSL designs.

VDSL represents one of the fastest services defined for deployment over copper wire and the products to be developed by Amati and NEC should provide the fastest access products (modems) capable of transmission over existing copper telephone networks.

These networks today carry voice transmission to millions of telco service subscribers; with VDSL, the same connections would carry multiple broadcast quality video transmissions, Internet connections, and other high-speed services simultaneously with voice transmission.

The agreement between NEC and Amati that will enable both companies to act as manufacturing sources for VDSL products based on the to be developed components and software. These products are expected to be used in advanced fiber access systems that enable the phone service providers to extend fiber optics closer to the subscriber.

Amati, as part of the agreement, will also be able to manufacture VDSL products to be used by NEC in producing high-speed transmission systems.

NEC will employ the newly developed VDSL transceiver LSI for NEC's Fiber To The Curb (FTTC) systems including FTTB (Building), FTTCab (Cabinet), FTTN (Neighborhood) and NEC's Digital Set Top Box named BAX product family by using NEC's advanced ATM and state-of-the-art fiber optics technologies.

The combination of NEC's ATM and fiber optics technologies and Amati's VDSL technology assures realization of Broadband Access Systems to support various services including fast Internet access, interactive video services as well as existing narrowband services.

VDSL is being developed to permit transmission rates up to 60 Mbps over a single copper pair of wires. The technology is capable of providing both symmetrical as well as asymmetrical digital connectivity. VDSL provides high-speed over fiber networks as they approach the neighborhood, at distances of 6,000 feet or less. VDSL technology permits variable data access rates depending on the length of the line.

At 1,000 feet, VDSL can provide 60 Mbps of throughput, which can be allocated as required for downstream and upstream rates. For example, variable data rates can be selected to meet application requirements such as 30 Mbps downstream and 30 Mbps upstream, or 45 Mbps downstream and 15 Mbps upstream.

This technology differs from ADSL in that ADSL is designed for longer loops at data rates up to 6 Mbps. In both technologies Amati is basing their solutions on their patented DMT technology that provides for much higher performance over longer loops and noisier (real world) conditions in both ADSL and VDSL systems.

Amati, which has been awarded the T1/E1 ANSI and ETSI industry standards for its DMT technology implementation of ADSL, has recently made contributions to the T1/E1 committee describing Amati's technology as part of the effort to establish standards for VDSL services.

NEC Corp.

NEC Corp., founded in 1899, is headquartered in Tokyo, Japan and had net sales of $41 billion ($US) in the 1995-96 fiscal year. NEC manufactures and markets a broad range of products, including computer systems; communication systems, which extend from switching systems to cellular phones; and electronic devices, which extend from microprocessors to memory chips.

Amati Communications Corp.

Amati is a leading developer of advanced transmission equipment utilizing DMT technology for the ADSL, Very High-Speed Digital Subscriber Line (VDSL) and cable modem markets. Amati is participating in tests of 2 Mbps, 4 Mbps and 6 Mbps video-on-demand (interactive video)and broadcast video services being offered by PTTs in Europe and the Asia-Pacific, system integrators include companies such as Philips, Italtel, Tadiran and NEC (AU).

Amati is also providing ADSL/DMT equipment at 6 Mbps and 4 Mbps for GTE's current Internet access trials in Washington and Texas. Additionally, Amati is a provider of network connectivity systems for the internetworking and OEM marketplaces.

The company's connectivity products include local area network gateways, client-based workstation software and network data communications interfaces. -0-

Note to Editors: Statements made in this press release which are not historical, including statements regarding product demonstration, product capabilities and markets, are forward looking statements and as such are subject to a number of risks.

Please see the company's Annual Report and Form 10-K for the 1996 fiscal year and other reports filed with the Securities and Exchange Commission for additional disclosure regarding such risk factors.

CONTACTS: Amati Communications

Benjamin W. (Tac) Berry, 408/879-2035

or

Simon/McGarry Public Relations

Carol Felton, 408/746-0911

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