Broadmedia Announces freeTone, First Flat-Rate Voice-Over-The-Internet Telephone Service For Business; Provides Full PBX Functionality Over The Internet, Does Not Require A PC.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 12, 1999--

Broadmedia Inc., (www.broadmedia.com) today announced the availability of freeTone service, the first monthly flat-rate telephony service that uses the Internet to dramatically reduce the cost of international calling for businesses that do not have a private global network. The freeTone service does not require the use of a PC, and instead provides business with the full functionality of their PBX over the Internet. Already, more than 100 businesses are using Broadmedia's freeTone service for unlimited international calls between Asia and the United States for only $65 a month.

The freeTone service is currently available between Taiwan and California. Starting in November, Broadmedia will expand freeTone services to connect businesses throughout the United States with businesses in Japan, Hong Kong, Singapore and Israel.

"International calls can be a significant expense for any size business, but smaller businesses typically lack the technical resources to take advantage of private network solutions designed for enterprise customers," said Ting Herh, Broadmedia's Chairman, CEO and President. "Broadmedia is focused on providing a low-cost alternative, so these businesses can quickly and easily take advantage of the Internet for telephony services."

Faraday Technology Corp., a full-service ASIC design company with offices in Taiwan and California, uses the freeTone service to keep international offices in close communications.

"In order for Faraday Technology to stay competitive and build the products our customers demand, manufacturing sites in Taiwan need to be in constant contact with our marketing and sales people in Silicon Valley," said Kevin Yu, Faraday general manager. "While the Internet helped improve our efficiency in data communications, we couldn't afford the huge investment in private, large-scale voice-based systems. Broadmedia gives us the same communications advantages as our much larger competitors at a fraction of the cost and complexity."

Advantages Of The freeTone Service

The freeTone service does not require the use of a PC. Instead, it provides full phone-based PBX functionality -- such as conference calling, voice mail and call hold -- over the Internet for all employees in the company. In addition to providing more features than PC-based VoIP solutions, freeTone service has faster call set-up and higher call-completion than international PSTN (public switched telephone network). And since Broadmedia provides full installation, management and maintenance of the freeTone service, customers get access to the latest upgrades in technology and features as they become available.

Big Benefits For Businesses

Broadmedia's freeTone flat-rate international telephony service benefits branch offices, remote offices and smaller businesses in a number of ways: -0-

--   Cuts overall telephony costs dramatically by providing
     international calls from office-to-office for a low rate of $65 a
     month;

--   Eliminates the need for additional capital expenditures, since
     the service does not require a company to purchase any new
     network or telephone equipment;

--   Protects a company's investment in legacy systems by integrating
     PBXs (Centrex or KTS) and business Internet services;

--   Adapts to the way a company typically conducts business by
     working with either cellular or wired telephones; and

--   Reduces telephony costs throughout the organization by allowing
     remote offices and remote employees to dial into the local office
     and make international calls as part of the fixed price of $65 a
     month.
-0-

Technical Expertise

Broadmedia's freeTone service is based on years of networking expertise. The company's heritage in semiconductor research and manufacturing gives it a first-to-market advantage over potential competitors eyeing voice-over-IP solutions for non-enterprise customers, and a price advantage over larger enterprise-focused packages.

In particular, the company's custom-designed chip-set and proprietary TCP/IP firmware combine to create a compact plug-and-play device, the G-phone, that sits between the customer's phone system and the local area network. Once a call is routed to the Internet, a Broadmedia device sets-up calls between end points, and maintains customer-specific logs so customers can access usage statistics and calculate savings.

Pricing

Broadmedia's freeTone service is available for $65 a month, and requires no equipment purchase. All that is required at the customer location is a standard BPX (Centrex or KTS) and an always-on Internet connection.

About Broadmedia

Broadmedia Inc. is a privately held corporation offering network services that allow businesses to use the Internet for simple and inexpensive communications. The company's freeTone service is available now. In November, freeTone will be available in Hong Kong, Japan, Singapore and Israel, followed by other areas of the world.

The company also supplies OEM partners with technology to address consumer Internet teadquarters in Sunnyvale, Calif., and offices in Hsinchu Science Park in Taiwan.