BroadBand Technologies, Inc. Reports Financial Results For The Third Quarter 1997.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Oct.30, 1997--BroadBand Technologies Inc., (NASDAQ:BBTK) the leading provider of interactive switched digital broadband systems, today reported results for the third quarter ending September 30, 1997. Net sales for the quarter were $ 2.1 million, a decrease of $ 3.6 million from the $ 5.7 million recorded for the same period in 1996. The company reported a net loss for the quarter of $16.5 million or $1.24 per share, compared with a net loss of $ 8.5 million or $.64 per share, for the same quarter in 1996. Increased losses were due to one-time charges and lower customer volumes. A reserve of $5 million or $.38 per share was accrued for BroadBand's share of performance fees relating to product delays for the joint Lucent Technologies/BroadBand Technologies Switched Digital BroadBand Access System (SDBAS) product. In 1997 BroadBand has reserved its maximum liability under the agreement with Lucent and payment of such fees, which are limited to $1 million per year, should occur over the life of the agreement. An additional one-time charge of approximately $.9 million or $.06 per share was taken primarily for obsolete test equipment. Adjusted for the one-time impacts of performance fees and obsolete equipment, the net loss would have been $10.7 million or $.80 per share. The company ended the quarter with a strong balance sheet, with cash and investments of $130 million.

Domestically, BroadBand has made progress in completing development of its Fiber Loop Access (FLX)(R)-2500 platform as Bell Atlantic turned up service for initial customers in Philadelphia. SBC more than doubled the number of customers turned-up in its Richardson field trial, and a significant Competitive Local Exchange Carrier (CLEC), RCN, made its initial selection of the SDBAS platform for offering competitive local access. Internationally the company received orders from TELUS for six hundred NetFLX(TM) high speed data modems in connection with its full service network trial in Alberta Canada, received commitments for two lab field/trial systems in Europe and was selected by ACTEW, a power and water utility, to support their international CLEC effort in Australia.

"During the quarter we achieved a key strategic milestone as RCN, an experienced CLEC with competitive know-how and financial muscle, selected the SDBAS platform for its cost-effective scalability, operational efficiencies and multiple service capabilities of voice, high-speed data and video," said David Orr, President and CEO of BroadBand Technologies. "We also continued to move forward with SBC which is now turning up nearly 1,000 telephony customers a month and Bell Atlantic who has launched its First Office Application in Philadelphia after successfully completing its stringent lab evaluations."

However, the company's results and outlook continue to reflect order delays due to a number of factors including product delays impacting turn-up of telephony services at Bell Atlantic, the announcement of a new product by Lucent Technologies, merger activity among the company's major customers, the long evaluation and implementation process typical of major communications infrastructure changes and regulatory uncertainties.

RCN Selects SDBAS Platform to Target Northeast States

During the quarter, RCN, a major CLEC in the Northeast, selected the FLX-2500 platform for its planned deployment of thousands of lines in Somerville, Massachusetts and the opportunity to reach hundreds of thousands of customers by the year 2000. RCN, which recently went public and is backed by Peter Kiewit and Sons' Inc. has revenues of nearly $400 million in long distance, local telephony, high-speed data, Internet and video services; and its marketing plan encompasses nearly 30% of the nation's telephone lines. This marks the first initiative by a CLEC to begin utilizing the FLX-2500 architecture for its facilities-based, local loop broadband network and signals a significant milestone for facilities-based, residential focused, competitive local access. It validates the business case for BroadBand's ATM-to-the-home FLX platform, which delivers telephony, high-speed data and Internet access services over dedicated bandwidth.

"RCN is firing the first shot toward creating real competition in the local loop and is arming themselves with BroadBand's technology, which allows them to bundle multiple high-bandwidth services over a single integrated cost effective system," Orr said.

BroadBand was also selected by Hutchinson Telephone Company, a Minnesota-based independent, for direct deployment of fiber-based services on BroadBand's FLX platform to its nearly 12,000 customers. Hutchinson Telephone is the first of the nation's 1,000 independent telephone companies, representing over 10 million phone lines, to deploy a fiber-to-the-curb solution.

Bell Atlantic Turns Up Initial Services in Philadelphia and SBC More than Doubles the Number of Customers in Richardson.

After rigorous lab testing, Bell Atlantic has turned up their initial customers on the Switched Digital Broadband Access System (SDBAS). "We are encouraged by the product turn-up for Bell Atlantic's First Office Application," Orr said.

--During the turn-up of the First Office Application, the SDBAS platform is being tested and monitored for validation of Bell Atlantic's business case assumptions relative to revenue opportunities, construction efficiencies and operational cost savings which will continue to impact BroadBand's near term revenues.

--Additional development is also required by Lucent to provide a stable telephony platform for commercial deployment.

SBC continues to turn up customer services on SDBAS in the Richardson, Texas, trial currently in progress, with nearly 5,500 customers receiving advanced telephony services enabled by the combined BroadBand/Lucent SDBAS platform, with plans for additional high-speed data and Internet access services in the near future. SBC has now completed the construction of the SDBAS System in Richardson, providing 30,000 homes with the potential to receive advanced telephony services today and high-speed data in the future.

BroadBand Has Option To Work With Alternative Partners In U.S. & Canada

During the quarter, BroadBand Technologies became free to work with alternative partners as it continues to negotiate its participation with Lucent in their recently announced AnyMedia(TM) digital loop carrier product. While discussions are ongoing, Lucent has given BroadBand notice that it will not participate in the AnyMedia product development, triggering BroadBand's option to make its Switched Digital Broadband technology available to other partners in the U.S. and Canada. Resolution of BroadBand's participation in AnyMedia should occur in the near future, but there can be no assurances as to the outcome of such discussions. Lucent continues to have an exclusive commitment to purchase all its Switched Digital Broadband requirements from BroadBand for the current generation product through at least Nov 1, 2000.

BroadBand Ships High Speed Data Modems to TELUS and Australian CLEC Selects FLX Platform

In Canada, network operator TELUS ordered NetFLX Ethernet modems to support market trials of BroadBand's Switched Digital Broadband System in Calgary and Edmonton. This marks the first deployment of BroadBand's FLXConnect(TM) family of digital customer premises equipment in connection with BroadBand's FLX-2500 system for Internet access, which allows users to surf the World Wide Web hundred of times faster than today's outdated networks. Early indications from the TELUS trial suggest that data service take rates will be higher than originally anticipated.

BroadBand Technologies and its French partner, SAT, recently announced that ACTEW, a government-owned utility in Australia has selected a FLX-based solution for an initial trial of 1,000 homes in the Canberra area in early 1998. ACTEW plans to build a FTTC network of 120,000 lines over the next three years providing a comprehensive range of services, including fiber-based telephony, high-speed data and Internet, video and utilities management services.

BroadBand and its partner Bosch also received purchase commitments for the FLX-2500 platform from Telefonica in Spain and CNET, the technology division of France Telecom, for technology qualifications and lab testing.

BroadBand Technologies Inc., based in Research Triangle Park, N.C., was founded in 1988. Its mission is to deliver products and services that enable network and service providers to offer consumers robust, economical electronic access to advanced communication, entertainment and information services.

This press release contains forward looking statements, including statements about product development by BroadBand and its partners, relationships with its partners, future product performance and future decisions of customers and potential customers about the Company's products. The Company's Form 10-K, Form 10-Qs and other documents on file with the Securities and Exchange Commission identify important factors which could cause actual results to differ materially from those indicated by the forward looking statements. However, forward looking statements are beyond the ability of the Company to control and in many cases the Company cannot predict what factors would cause actual results to differ materially from those indicated by the forward looking statements.

For more information on BroadBand Technologies, please see the BroadBand Technologies home page at http://www.bbt.com .

Note to editors: FLX is a registered trademark of BroadBand Technologies Inc. All other trademarks are trademarks or registered trademarks of their respective companies.

-0-

                     BROADBAND TECHNOLOGIES, INC.
                       STATEMENTS OF OPERATIONS


                                   3 Months Ended     9 Months Ended
For the periods ended
September 30, 1997
and September 30, 1996            1997       1996     1997       1996
                                    (Unaudited)         (Unaudited)
(Dollars in thousands
except per share amounts)

Sales                           $ 2,125    $ 5,706  $12,668   $15,218

Cost and Expenses:
Cost of Sales                     1,877      5,313   10,216    14,793
Research & Development            7,473      6,174   20,199    16,317
Performance fees and
  obsolete equipment              5,841          0    6,841         0
Sales, Marketing and
  Administration                  3,791      2,929    9,826     8,171
Net Interest Expense              1,641      1,647    4,865     2,437
Net Interest Income              (1,988)    (1,859)  (5,513)   (3,952)

Pretax (loss)                   (16,510)    (8,498) (33,766)  (22,548)
Income Tax Provision                 --         --       --        --

Net (loss)                     ($16,510)   ($8,498)($33,766) ($22,548)

Average Shares & Equivalents
  (Thousands)                    13,279     13,241   13,253    13,195

(Loss per Share)                 ($1.24)    ($0.64)  ($2.55)   ($1.71)


-0-

                       BROADBAND TECHNOLOGIES, INC.
                              BALANCE SHEETS


                              September 30 1997     September 30 1996
                                 (Unaudited)             (Audited)
(Dollar in thousands )

Assets
Current assets:
Cash and investments               $108,384              $129,581
Accounts receivable                   3,078                 6,284
Inventories (net)                     2,855                 1,533
Other Current Assets                  1,394                   954
                                  -----------            -----------
Total current assets                115,711               138,352
Restricted Cash                       4,793                   451
Property and plant equipment (net)    9,633                10,545
Long Term Assets                      2,712                 3,273
Long Term Investments                16,394                18,726
                                   $149,243              $171,347

Liabilities and Shareholders' Equity

Current Liabilities:
Accounts Payable
  and accrued liabilities          $ 11,004              $ 10,354
Deposits and other
  accrued liabilities                 3,285                 3,258
Other current liabilities             7,124                10,834
                                    ----------           ----------
Total current liabilities            21,413                24,446

Long Term Debt, Deposits,
  Liabilities                       132,330               118,000

Total Shareholder's
  (deficit)/equity                   (4,500)               28,901
                                   ----------            ----------
                                   $149,243              $171,347

CONTACT: BroadBand Technologies Inc. Copithorne & Bellows

Timothy Oakley Joann Anderson/Jack Varley

919/405-4611 617/450-4300

[e-mail] [e-mail]