BROADBAND TECHNOLOGIES, THOMSON CONSUMER ELECTRONICS ANNOUNCE COST BREAKTHROUGH IN DIGITAL SET-TOP TECHNOLOGY; Second Generation Technology Accelerates Price Performance.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--June 20, 1995-- BroadBand Technologies Inc. (NASDAQ:BBTK) and Thomson Consumer Electronics announced today the signing of a Memorandum of Understanding (MOU). Under terms of the MOU, the companies are pursuing an agreement to enable Thomson to produce digital receiver/decoders (set-top boxes) with open interfaces at the set-top and on the network at a price from $50 to $90 less than the equivalent passband hybrid fiber coax (HFC) solutions.

A mutual objective is to develop cost- effective set-tops with an open standard for use by telephone companies worldwide. BroadBand Technologies reports its research has demonstrated that the products which may be developed by the two companies can be marketed at prices much lower than equivalent HFC set-tops.

Thomson, which manufactures and markets the highly successful RCA Digital Satellite System, has announced its strategy to become a leading worldwide supplier of digital set-top boxes. These set-tops will be required by telephone and cable companies for direct home delivery of movies and interactive services such as electronic shopping, ticket ordering, banking, and other electronic activities. Both telephone and cable companies are investing heavily to set up broadband networks which could include the deployment of millions of digital set-tops over the next five years.

"Our goal is to accelerate the deployment of digital systems by facilitating cost- effective, interoperable network set-top solutions in the marketplace," said Salim A.L. Bhatia, President and CEO of BroadBand Technologies. "Thomson is a world leader in consumer electronics. They know how to sell in this competitive marketplace. With this announcement, we intend to be positioned even stronger to provide our customers with products that lead the industry in price and performance."

"We chose BroadBand Technologies because we wanted to strengthen our position in the evolving broadband distribution and set-top business," said Thomson's James E. Meyer, Senior Vice President, Product Management. "BroadBand's technology is already mature, and it would allow us to develop digital set-tops now to provide our customers with the services they need at a price point that the market demands."

The Memorandum of Understanding between BroadBand Technologies and Thomson, which is mutually non-exclusive, brings together two industry leaders.

Thomson is the world's largest manufacturer of digital set-tops. The company's high volume and advanced digital receiver/decoder technology make it the industry's cost leader. Thomson also is the largest manufacturer and marketer of color TVs in the U.S. (RCA, ProScan, GE brands), and the fourth largest consumer electronics company in the world.

BroadBand Technologies is the industry cost and performance leader in fiber to the curb (FTTC) Switched Digital Video (SDV) products and was the first to market with SDV technology-based products. BroadBand is offering its second generation product on its Fiber Loop Access (FLXO) platform to network operators worldwide.

According to the two companies, products that would be developed by Thomson and BroadBand Technologies under a final agreement being negotiated, would help deliver increased capacity and advanced features and services in a standard format, with a standard network interface provided by BroadBand's FLX platform. These standards-based, network to set-top interfaces are being provided to appropriate standards-making bodies -- including the ATM Forum and DAVIC -- for review as part of the two companies' commitment to the speedy deployment of network set-top systems. By incorporating industry standards such as Asynchronous Transfer Mode (ATM) cell communication and 16-CAP (16 Carrierless Amplitude and Phase Modulation) encoding, the products would be designed to offer the customer the most-cost-effective solution available to access digital video and interactive multimedia services.

The companies report that the new set-tops would achieve price/performance leadership over existing HFC set-tops by simplifying the network to set-top connection. Using low frequency, baseband transmission eliminates the need for forward error correction, adaptive equalization, and demodulation. The result would be a product designed to maximize performance while using fewer components and realizing significant savings.

BroadBand Technologies, Inc., based in Research Triangle Park, N.C., was founded in 1988. Its mission is to provide network operators with the systems required to bring the power of interactive switched digital broadband technology to consumers. The company's Fiber Loop Access (FLX) System is currently being deployed by Bell Atlantic and is being trialed by Southwestern Bell. It has been in trials at most regional Bell operating companies, by GTE, and by a number of international telephone companies.

Note to Editors: FLX is a registered trademark of BroadBand Technologies, Inc.

CONTACT: BroadBand Technologies, Inc.

Julie Price, 919/405-4816

or

Copithorne & Bellows

Jack Varley, 617/252-0606

or

Thomson Consumer Electronics

James Harper, 317/587-4347