CNC Selects Salira to Deliver Broadband Services in Beijing and Changsha City; Systems Being Used to Deliver Advanced Voice, Video and Data Services to Business Customers.

Business Editors/High-Tech Writers

SHANGHAI, China--(BUSINESS WIRE)--July 16, 2003

Salira Optical Network Systems, a leading provider of optical access systems, today announced that China Netcom Corporation Ltd. ("CNC") has partnered with Salira Shanghai Ltd. to cooperate in the enhancement of the service provider's facilities-based telecommunications networks. CNC has agreed to deploy the Salira 2000 Platform in city of Beijing and in Changsha City in Hunan Province. These systems will be used to deliver advanced voice, video and data services to business customers in a variety of Fiber-to-the-Premises (FTTP) deployments.

"We look forward to working with Salira to provide a broad range of innovative broadband services to our customers," said Zhiwei Yang, CTO of China Netcom Corporation Ltd. "Salira's products simplify the complexity and operational issues associated with deploying traditional services, while enabling CNC to offer the new IP-based services that our customers are demanding."

CNC will use the Salira 2000 Platform to connect customers to existing SDH rings in order to deliver traditional E1 TDM services. CNC will also deploy the system to facilitate Layer Two Tunneling Protocol (L2TP) for VPN services that will deliver broadband services to distributed enterprise locations. In addition, CNC will use Salira's products to deliver economical, advanced IP-based services like Video-on-Demand (VOD) and Voice over IP (VoIP).

"We are looking forward to working with CNC to enhance their existing network infrastructure," commented Wei Gao, president of Salira Shanghai Ltd. "Salira recognizes that it is important for an established carrier like CNC to extend the life of existing equipment while laying the foundation for the next generation of advanced broadband services."

The economics associated with the Salira 2000 Platform enable service

providers to achieve positive return on their investment in less than a year, including the cost of feeder and distribution fiber, and all associated Cap Ex and Op Ex. Salira's systems give carriers the ability to offer traditional TDM services and advanced IP-based broadband services in one integrated system to facilitate the migration to a more advanced network architecture.

About China Netcom Corporation Ltd.

China Netcom Corporation Ltd. ("CNC") is a facilities-based broadband telecommunications operator in China. CNC provides a full spectrum of services and solutions to meet the broadband telecommunications needs of businesses and individuals. Its core business includes providing Internet broadband access and integrated telecom services to residential and corporate customers, and building the infrastructure for China's New Economy. CNC's comprehensive collection of telecom licenses, including the license to operate international gateways out of China, makes it a peer of incumbent operators such as China Telecom.

About Salira Optical Network Systems, Inc.

Headquartered in Santa Clara, Calif., Salira builds access systems that enable service providers to reduce the life cycle cost of telecommunications services. Salira's systems are used by leading service providers to deliver traditional TDM services and emerging IP/Ethernet-based services over a converged delivery platform. Salira has closed multiple rounds of financing and attracted equity capital from leading venture funds in North America, Europe and Asia. Investors include Mobius Venture Capital, Vertex Management, Sofinnova Ventures, WI Harper, Pac Rim Ventures and Manitou Ventures. Salira Shanghai Ltd. is a wholly-owned foreign enterprise incorporated in the province of Shanghai. Salira US website: www.salira.com; Salira Shanghai Ltd. website: www.salira.com.cn.