Axerra Networks' Pseudo-Wire Solution Deployed by Hong Kong Broadband Network Limited; Leverages Carrier Ethernet to Provide Mobile Wireless Operators With High-Capacity, Flexible Backhaul Services.

HONG KONG & BOCA RATON, Fla. -- Axerra Networks, "The Pseudo-Wire Company(TM)," and the leading provider of circuit emulation and service emulation solutions, today announced that Hong Kong Broadband Network Limited ("HKBN") has selected Axerra Networks' Pseudo-Wire solution for its Carrier Ethernet network. Axerra's Pseudo-Wire solution enables HKBN to leverage its Carrier Ethernet network and provide high-capacity, flexible voice and data backhaul services to mobile wireless operators, offering a full-service alternative to TDM in the mobile radio access network (RAN).

In June 2002, HKBN, a wholly-owned subsidiary of City Telecom (H.K.) Limited ("CTI"), successfully established the largest Metro Ethernet IP network in the world, and is in the process of extending its network coverage from the existing 1.2 million homes representing 60 percent of households in Hong Kong, to serve approximately 80 percent of the households in Hong Kong. Its parent-company, City Telecom (H.K.) Limited ("CTI"), is a fast growing and innovative provider of residential and corporate fixed network and international telecommunications services in Hong Kong.

"With Axerra's Pseudo-Wire solution, we are able to meet the needs of mobile operators looking for a more effective way to backhaul voice and data traffic, especially emerging, high-speed data services," said Paul Cheung, Managing Director of HKBN. "Our extensive Carrier Ethernet network, in combination with Axerra's Pseudo-Wire solution, provides the high-bandwidth, low-latency connections to efficiently transport voice and data from cell sites to BSC/MSCs, positioning HKBN as a compelling alternative to incumbent carriers who are providing backhaul over TDM networks."

Axerra Networks continues to lead the industry in live deployments of Pseudo-Wires in mobile backhaul applications. Axerra's Pseudo-Wire solution supports all generations of mobile wireless networks, preserves native signaling and features across packet networks, enables bandwidth sharing, and provides the clock recovery capabilities that are required for reliable mobile services. AXN Pseudo-Wire Gateways and Access Devices(TM) support circuit emulation and service emulation, including Frame Relay/HDLC, Ethernet, and even ATM services for 2G, 2.5G, and 3G voice and data aggregation from a single box. AXN Pseudo-Wire platforms control latency, jitter, and packet loss - critical capabilities for reliable mobile applications.

"We are extremely pleased that HKBN chose Axerra to provide the technology needed to enable an efficient, cost-effective alternative for the backhaul of mobile wireless voice and data traffic," said Gil Itkin, Axerra's Vice President - Sales, APAC. "HKBN's state-of-the-art Ethernet network, combined with the power of Axerra's Pseudo-Wires, has created a significant business opportunity as the numerous mobile operators in Hong Kong, each with several thousand cell sites, can now rely on HKBN to support their full complement of 2G and 3G services using its flexible, high-capacity Ethernet network."

About City Telecom / Hong Kong Broadband Network

Established in 1992, City Telecom (H.K.) Limited (SEHK:1137) (NASDAQ:CTEL) provides integrated telecommunications services in Hong Kong. City Telecom's wholly-owned subsidiary, Hong Kong Broadband Network Limited (HKBN), is in the process of expanding its Metro Ethernet from 1.2 mn to 1.8 mn homes pass, reaching 80% of Hong Kong's total population. HKBN has achieved an aggregate Voice, Broadband (symmetric 1000Mbps, 100Mbps and 10Mbps), IP-TV and Corporate data service base in excess of 600,000 subscriptions. HKBN is now the largest alternative operator for residential voice and broadband services in Hong Kong. Additional information on City Telecom can be found at http://www.ctihk.com.

About Axerra Networks, Inc.

Axerra Networks is the leading provider of circuit emulation and service emulation solutions over packet access networks. Axerra's Pseudo-Wire solutions enable competitive service providers, mobile wireless operators, cable MSOs, and incumbent carriers to extend IP + legacy voice and data services in native format over Ethernet, IP, and MPLS networks. The result is greater operational efficiency, new revenue opportunities, and a smooth migration strategy to a single converged network, without stranding any revenue streams from profitable legacy services. With Axerra's Pseudo-Wire solutions, service providers can convert any packet access network (Carrier Ethernet, broadband wireless including WiMAX, xDSL, EPON/GPON, cable HFC, etc.) into a full-service alternative to TDM access. For more information, please visit: http://www.axerra.com.