DiviCom Selected by British Digital Broadcasting for U.K. Terrestrial Television Project; BDB Contract Represents Half of All Licensed DTTV Broadcasters.

LONDON--(BUSINESS WIRE)--May 8, 1998--DiviCom Inc. (NASDAQ:CUBE), a leading international provider of compression systems for digital television, today announced that British Digital Broadcasting PLC (BDB) has selected DiviCom to supply headend compression and multiplexing equipment at its digital terrestrial television (DTTV) broadcast center located in central London.

BDB has announced that broadcasting from this center is currently scheduled to begin in the last quarter of 1998.

BDB has ordered DiviCom's newest program encoder, the MediaView MV40. The MV40 received an "Editor's Pick of Show" award, given by Television Broadcast Magazine, at the recently concluded National Association of Broadcasters tradeshow in Las Vegas. In addition to the MV40, BDB will be using the MediaNode MN20 multiplexer and the DiviCom MPEG Media Toolkit (MMT).

Why DiviCom?

"BDB chose DiviCom for compression and multiplexing equipment because the MediaView MV40 encoder delivers exceptional quality," said John Egan, Director of Operations at British Digital Broadcasting PLC. "The company also has a strong track record in integrating its products into fully working headends. It's imperative that we select the best equipment as we build the infrastructure that will change the way most people receive television in the U.K."

As part of the project, BDB has hired DiviCom to integrate its headend equipment with the MediaGuard conditional access system provided by Canal+. This integration represents an important step forward by DiviCom in adding to its list of third-party vendors whose products work in concert with those from DiviCom.

"DiviCom is honored to have been selected by British Digital Broadcasting for its new DTTV multiplexes in the U.K.," said Tom Lookabaugh, president of DiviCom. "Quality and interoperability are key issues for our customers, and we believe they are critical to making DTTV a reality."

What is Digital Terrestrial Television in the U.K.?

Digital Terrestrial Television is the next step in television. It is a new, more efficient way of transmitting television broadcasts, offering viewers more channels, extra services and better quality pictures and sound.

In order to view DTTV broadcasts, all viewers need is a simple settop box that plugs into their existing television and aerial socket. Signals are received through an aerial antenna and decoded by the settop box. Viewers will be able to receive about 30 channels: the existing 5 free to air channels; new free channels from the BBC and ITV; and, by subscribing to BDB, they will be able to receive a basic package of 12 (digital) channels from Carlton Communications, Granada Group and BBC/Flextech -- and 3 premium channels of sports and movies from SKY.

How the Pieces Fit Together

The DiviCom MN20 multiplexer works in tandem with the MV40 digital encoder to maintain a multi-program stream that allocates the appropriate bandwidth to each channel according to the complexity of a program's content. This is a feature of the MV40 called DiviTrack, an advanced "lookahead" statistical multiplexing system that allocates data rates frame by frame.

Other key players in partnership with BDB are Canal+, which is providing conditional access, end-to-end systems integration and central system information (SI); Castle Transmission and British Telecom, who are providing the distribution and transmission system; settop box vendors Nokia, Toshiba, Sony, Pace Micro, Grundig and Philips; and British Telecom, who is providing customer management services.

British Digital Broadcasting

British Digital Broadcasting is a partnership between Carlton Communications and the Granada Group, which each own 50% of the company. BDB will be the U.K.'s largest commercial digital terrestrial broadcaster and will launch at least 15 channels from the U.K.'s leading television production and broadcasting companies -- Carlton, Granada, BBC/Flextech and Sky.

DiviCom Inc.

DiviCom develops and integrates products that make digital video networking possible. Products include audio/video encoding, data broadcast solutions, network management systems, consulting and integration services. Based on the MPEG-2, DVB and ATSC international standards, DiviCom's products enable digital video broadcasting over a variety of networks including satellite, wireless, fiber and cable.

DiviCom is a wholly owned subsidiary of C-Cube Microsystems Inc. (NASDAQ:CUBE), and both companies are based in Milpitas, Calif. C-Cube is the leading provider of digital video silicon solutions for the communications, consumer electronics and computer markets. DiviCom can be reached at 408/944-6700 or on the World Wide Web at http://www.divi.com.

This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The completion of the BDB broadcasting center and the commencement of broadcasting discussed in this press release (including DiviCom's ability to integrate its products with those of Canal+) are subject to potential delay and other risks inherent in hardware/software development and integration. Also, there is no assurance that Digital Terrestrial Television will meet current specifications as to number of channels, services or picture or sound quality due to technological, economic or other constraints or that, even if these specifications are met, that it will achieve market acceptance, due to the rapidly changing market for such products, competition and other factors. All forward-looking statements included in this press release are based on information available to DiviCom on the date hereof, and DiviCom assumes no obligation to update any such forward-looking statements.

CONTACT: DiviCom Inc.

Anne Hohenberger, 408/490-6688

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