Data Connection (DCL) and MetaSwitch Report Record 30% Revenue Growth, 24th Consecutive Year of Profitability; Telecom Vendor Sees Traction for IMS Protocol, Switching and Applications Solutions; MetaSwitch Division Grows to 40% of Total Revenue.

LONDON -- Data Connection (DCL), a leading independent vendor of communications and telecom software and equipment to OEM and service provider customers, today released financial results for the 12 months to August 31, 2005. Driven by strong demand for its broad portfolio of IP Multimedia Subsystem (IMS) protocol, switching and applications solutions, including its Session Border Controller (DC-SBC) and MetaSwitch division's softswitch and unified communications products, the company's revenues increased 30% year-on-year to $68M. The year also represented the 24th consecutive year of increasing profitability, with record earnings of $16M.

"No one supplies telecommunications technology to a broader range of industry players than Data Connection," said Ian Ferguson, Data Connection founder and chairman. "We are therefore strongly positioned to benefit from the rapid adoption of IMS, many elements of which we pioneered from early concept to mass-market implementation."

Data Connection saw increased revenues from all its business units contributing to this record year for the entire company.

--MetaSwitch, the next generation softswitch division, more than doubled its gross revenue from the previous year, increasing its share of total revenue to 40%. The division now has over 170 deployments - up from 60 this time last year - with incumbent and competitive telephone operators, primarily in North America. Notable events during the year included the introduction of the UC9000 Unified Communications System, adding a powerful range of IMS applications services to the division's established strength in Class 4/5 softswitching, and the successful introduction of a distributed softswitch architecture with the CA9020 Call Agent, already deployed in more than 30 carrier networks.

--Data Connection's Network Protocols Group continued its leadership position in the areas of IP routing, MPLS, VoIP and ATM, and expanded into a major new product area with a portable, software-based Session Border Controller for OEMs, known as DC-SBC. In IMS networks, DC-SBC implements a range of security, address translation and quality of service functions within network elements such as edge routers, switches and media gateways. Strategic relationships announced during the year include Entrisphere, Fujitsu, Hammerhead Systems, Infinera, NEC, Photonic Bridges and QNX.

--The company's Internet Applications Group, which provides unified messaging, web conferencing and directory solutions, made particularly strong growth in the tier 1 service provider and government markets, by leveraging Data Connection's industry-leading expertise in next-generation, VoIP-based application services for the telecommunications market. Major recent R&D investment in key areas such as legacy voicemail replacement and service creation environment (SCE) functions, will sustain growth in the coming year.

--The Enterprise Connectivity Group continues to operate successfully through its long-term strategic relationships with IBM, Microsoft, Cisco, HP and other major OEMs, in addition to its direct sales to large enterprises.

In accordance with the objectives of the Employee Benefit Trust, which holds 100% of the company's shares, the profits will be distributed to the employees in recognition of their contribution to the success. This unique ownership structure has been key to the company's long-term investment strategy, and its ability to recruit, develop and retain the very best talent.

About Data Connection (DCL)

Data Connection Limited is the leading independent developer and supplier of next generation control and signaling plane protocols, and IP Multimedia Subsystem (IMS) applications technologies. Customers range from Silicon Valley start-ups to established vendors such as Cisco, IBM, Lucent and Microsoft, and from emerging competitive telcos to tier one carriers including British Telecom and SBC Communications Inc.

Net profits have exceeded 20% of revenue every year since the company was founded in 1981. Data Connection has more than 300 employees and is headquartered in London, UK with primary US offices in Alameda, CA, and Reston, VA.

For more information, see www.dataconnection.com.

About MetaSwitch

MetaSwitch, a division of Data Connection, is an industry-leading vendor of IP Multimedia Subsystem (IMS) switching and applications solutions for both packet and circuit-switched networks. Its widely deployed call agent, media/signaling gateway and application server platform supports a full range of legacy Class 4/5 capabilities and hosted unified communications services, and scales from a few hundred to millions of subscribers in both integrated and distributed configurations. Customers include incumbent and competitive local exchange carriers, as well as operators of broadband wireless, cable and fiber networks.

For more information, see www.metaswitch.com.

Data Connection and MetaSwitch are trademarks of Data Connection Limited and Data Connection Corporation. Brands and products referenced herein are the trademarks or registered trademarks of their respective holders. Copyright (C) 2005 Data Connection Limited