BroadLogic and Beijing Capital Assets Management to Develop Video Network for China; Companies to Exploit Video Applications of Revolutionary WideBand Technology.

SAN JOSE, Calif. -- BroadLogic Network Technologies, a supplier of groundbreaking semiconductor chipsets to the broadband industry, today announced an agreement with Beijing Capital Assets Management (CAM) to jointly develop and deploy a cost-effective digital video communications network for use throughout China, and ultimately other countries. The network will enable Chinese network operators to distribute a robust suite of digital programming, including educational, news, sports, and entertainment channels, to televisions in small- to medium-sized communities which today have little or no access to broadcast or cable television.

Known as the China Rural Digital Cable System, the network will utilize BroadLogic's advanced WideBand silicon and CAM's satellite receiving technology as well as its product engineering, manufacturing, sales and support.

"In last month's government meeting, the Chinese central government decided to dramatically enhance the infrastructure for rural areas over the next six years, with emphasis on distance learning and communications infrastructure," said Liu Xiaoguang, Chairman of Beijing Capital Group. "The Chinese government is committed to helping citizens living in remote areas improve their basic living as well as their spiritual life. TV will be the most important information source for the majority of these Chinese citizens. As a government-owned company, we are honored to play a significant role in this important project."

China has a population of approximately 1.3 billion people, with more than 70% living in rural communities which today have little or no broadcast or cable television service. CAM ultimately seeks to provide television service to over 900 million people in these areas using BroadLogic WideBand silicon.

"Expanding the reach of Chinese programming to serve all communities throughout the country represents a considerable challenge, especially when taking into account the costs associated with constructing new networks," said Yang Xiaobing, Executive Board Director of CAM, a wholly owned subsidiary of Capital Group. "We have evaluated all network alternatives and determined that BroadLogic's unique silicon provides the best approach to efficiently deliver a rich line-up of channels to homes in virtually every town. I am excited to see this practical solution being able to deliver a wide array of programming to both rural areas as well as major cities."

The first region targeted by CAM is to be SiChuan Province, the second largest agricultural province in China with a population of 87 million people. In SiChuan, an estimated 64 million people live in over 200,000 small- to medium-size communities. In these communities, there is very limited or no broadcast or cable television service available. CAM has obtained the SiChuan Government's support to trial the China Rural Digital Cable System in early 2007. Following a successful trial, CAM plans to populate across the entire province starting in 2008, and subsequently promote the technology to other provinces.

"To date, many leaders in the cable industry have acknowledged WideBand as an essential technology for delivering ultra-fast Internet connectivity and IP-based video services," said BroadLogic President and CEO, Tony Francesca. "In China, BroadLogic recognized a new application for WideBand that meets the objectives of the central government. Thanks to CAM's expertise and close working relationships within China, together we are developing a system for cost-effectively delivering multi-channel TV programming to a very large population."

About Beijing Capital Assets Management

Beijing Capital Assets Management is a subsidiary of the Beijing Capital Group Ltd. (Capital Group). Capital Group was established in December 1995 as a large state-run company based in Beijing dedicated to urban development, operations, and providing services for all of China. Presently, the six main industries that Capital Group deals in include: municipal basic infrastructure construction, real estate, finance, industrial technology, commerce and trade, tourism and hotels. Capital Group has 142 enterprises, consisting of holding companies and shareholding companies, of these, five holding companies are listed on both domestic and foreign stock markets, two shareholding companies are listed on foreign stock markets, and two security fund companies are listed on domestic markets, and one fund is listed on the Hong Kong Stock Exchange.

About BroadLogic Network Technologies

Headquartered in San Jose, California, BroadLogic designs and supplies breakthrough semiconductor technologies that enable broadband network operators to offer next-generation digital video, voice and data services. BroadLogic's technologies act as broadband engines to power both subscriber-premises devices (such as ultra high-speed cable modems and advanced DVR set-tops) and network infrastructure platforms. By enabling these devices to simultaneously process an order of magnitude more bandwidth than conventional approaches, BroadLogic's WideBand technologies unlock the true potential of broadband networks. For more information please visit, www.broadlogic.com.