BroadBand Technologies expands switched digital Broadband services platform into strategic markets; Company targets competitive local exchange carriers, long distance companies and universities for interactive voice, data and video networks.

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Aug. 12, 1996-- Capitalizing on its success with major telephone company customers, BroadBand Technologies Inc. (NASDAQ:BBTK) today announced that it will now offer the industry's only fully-deployable, comprehensive switched digital broadband services solution to a broader customer base.

BroadBand will continue to market its FLX(R)-2500 System, domestically and internationally, to RBOCs and independent telecommunications companies while aggressively targeting new players in the local loop such as long distance companies, competitive local exchange carriers and competitive access providers as well as cable television companies and university communities for full-service network deployment.

The company's expansion into new markets comes on the heels of its recent announcement that BroadBand, jointly with Lucent Technologies, will supply the SLC(R)-2000 Access System with FLX SDV to Bell Atlantic for a major infrastructure modernization program that will deliver high-quality telephone service as well as a comprehensive range of new, interactive voice, data and video services to millions of homes.

"While our competition is still struggling to bring their initial product offerings to the marketplace, we have implemented an aggressive market push to expand the breadth of our applications," said Salim A.L. Bhatia, president and CEO of BroadBand Technologies. "BroadBand is currently the only provider of switched digital broadband services to offer a deployable solution. As RBOCs such as Bell Atlantic and SBC Communications mine the benefits of a fiber-to- the-curb platform, and competition created by the Telecommunications Bill permeates the industry, it was a natural business decision to reach out to all carriers with a solution that will lower their operating costs, improve existing telephony services, and deliver new broadband interactive services. The FLX platform facilitates a strong entry for newcomers into the local loop."

According to Vern Mackall, senior analyst with Northern Business Information, a leading industry research firm based in New York City, "In the newly deregulated telecommunications marketplace, carriers of all types are looking to gain new revenue streams from selling bundles of value-added services. Multiple new competitors are interested in deploying these services over full-service networks that integrate voice, data and video delivery. BroadBand Technologies is an early leader in the switched digital broadband approach to full-service networks," he said.

Controlling the Franchise With Cost Effective Comprehensive Solution

In the newly deregulated telecommunications market, the $100 billion local telephone access and $70 billion long distance telephone service industry has attracted several new market entrants seeking to gain a foothold in the telephony business and at the same time provide a portfolio of services, such as high-speed Internet access and entertainment video. The challenge in the local telecom market is to control the customer franchise by providing one-stop shopping for all the information and entertainment network connection needs of the end users. According to Hamid Lalani, the newly-appointed group director of the strategic markets organization, "Companies that can provide a comprehensive -- yet cost-effective -- solution for this electronic connection will prove to be the ultimate winners."

With its deployment of the BroadBand FLX platform, Bell Atlantic is proving that it is now more cost-effective to deploy fiber in the local loop than copper. Bell Atlantic estimates a pay back of one to three years, which is substantially less than the current threshold. BroadBand expects competitive local exchange carriers, long distance companies and colleges and universities will want to experience the same cost savings by providing fiber-based broadband services directly to the end-user.

"By crossing the broadband upgrade cost target hurdles for incumbents in the local loop, we feel confident to be able to do the same if not better for carriers who currently have no significant investment in outdated plant in the local loop for the multiple services envisioned." Lalani said.

Bob Henry, BroadBand Technologies' vice president of sales and marketing points to the potential of the new strategic market segments. "We recognize that many companies are currently competing for a piece of the telecommunications pie," he said. "After meeting the aggressive cost targets of the RBOC residential market, we look forward to offering the same cost advantages to the mixed business, residential and university environments in these strategic markets." Henry added that BroadBand's move into these strategic markets will extend its lead over other broadband network solutions which have not yet been deployed. "As more and more companies turn to BroadBand Technologies to supply the necessary broadband components, it further supports the momentum behind BroadBand FLX-2500 System as the standard platform for cost-effective delivery of multiple voice, data and video broadband services to consumers," he said.

Market Dynamics Point to Opportunities

BroadBand's move to target competitive local exchange carriers, long distance carriers and colleges and universities establishes them in three significant market segments. The dynamics of these market areas favor significant deployment of broadband platforms and technologies:

"Competitive local exchange carriers (CLECs), including cable television companies and competitive access providers, are looking to compete against incumbent carriers to provide transport of narrowband voice and broadband data and video services to residential and business customers. CLECs are turning to new network services as a way to gain market share in the newly- deregulated marketplace and plan to deploy these advanced services before the incumbent provider has a chance to do so.

"At the same time, long distance carriers have put in place strategies in selected markets to become facilities-based local access providers, with one-stop-shopping for packages of local, long distance, data, voice and video services. This entry into the local loop better positions long distance telephone companies to reduce costs, leverage current investments in satellite technology and protect their long distance franchises.

"Finally, universities are continually expanding their communications systems to place instructors, students and graduates at the leading-edge of the technology revolution. With advanced communications tools, graduates and students are better equipped for the job market and teachers are better able to educate students and communicate with peers. Today, most prominent universities are building full-service networks directly to dormitories and classrooms, as well as to the extended university community, for high-speed Internet access and interactive digital television services.

Industry Leading Technology and System Capabilities

BroadBand's FLX-2500 solution brings together high-speed fiber optics, software and silicon chip designs to create a digital data pathway to the home. It is the only deployed system with the bandwidth of fiber-to-the-curb (FTTC) and the service capabilities of ATM switching. Its fiber-rich design provides unlimited bandwidth, superior signal quality and greater immunity to electromagnetic interference. The switched digital video architecture in this current application provides 52Mbps of dedicated downstream and 1.6Mbps of dedicated upstream bandwidth. It also provides for signal security and built-in multicast in a non-blocking architecture, and incorporates 16- CAP from Lucent Technologies' Microelectronics, making ATM to the home over twisted pair wiring possible. Because it reuses existing copper drops, the FLX-2500 offers an ideal solution for high-rises and university settings where rewiring densely-populated buildings would be prohibitively expensive.

Company Information

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

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

CONTACT: BroadBand Technologies Inc.

Julie Price, 919/405-4816

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Diane Parazin/Jack Varley

617/450-4300

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