ECI TELECOM RECEIVES ORDER FOR ACCESS NETWORK AND SDH EQUIPMENT TOTALING APPROXIMATELY $30 MILLION.

MANILA, Philippines--(BUSINESS WIRE)--August 16, 1995--The Philippines Telegraph and Telephone Corporation ("PT&T") and ECI Telecom Ltd. (Nasdaq/NM Symbol: ECILF) jointly announced today the signing of supply and long-term financing agreements totaling approximately $30 million covering the supply of ECI's SDH (Synchronous Digital Hierarchy) transmission systems and Access Subscriber Loop Multiplexers.

The equipment is to be supplied over a 30-month period beginning in September 1995.

PT&T, a domestic full-service telecommunications carrier in the Philippines, is embarking on a 300,000-line telephone network construction program in Metro Manila and elsewhere in accordance with the authorization it has received from the National Telecommunications Commission of that country. PT&T is one of a number of licensees which have received authorization to provide service in predetermined areas in addition to the existing national carrier, Philippines Long Distance Telephone ("PLDT").

PT&T will deploy ECI's "Add and Drop" SDH multiplexers ("ADM"), operating at 155 Mbit/sec (STM-1), 622 Mbit/sec (STM-4) and 2.5 Gbit/sec (STM-16), and network management software in self-healing fiberoptic rings in Metro Manila and around Laguna Lake. The network will be one of the first ADM rings operating at up to 2.5 Gbit/sec ever deployed. It will have the unique capability of providing direct access of 2 Mbit/sec signals to the 2.5 Gbit/sec ring.

The advanced subscriber loop (or access) multiplexers, ASLMX, to be supplied by ECI will enable PT&T to rapidly, efficiently and inexpensively add up to 125,000 subscribers.

Mr. Jose Luis Santiago, President of PT&T, said, "PT&T's SDH equipment will be used primarily to provide inter-exchange facilities connecting its own exchanges (central offices) and those of other telco's. These SDH networks will upgrade PT&T's capability to offer its growing corporate customer base leased broadband services, both switched and nonswitched, in the near future. The subscriber loop carrier equipment will be dispersed throughout the hybrid fiber/copper distribution plant in PT&T's various service areas."

Mr. David Rubner, President and CEO of ECI, said, "ECI is proud to take part in the telecommunications network modernization program of the Republic of the Philippines. The project that was awarded to ECI today will expand our existing installed base of equipment in the Philippines which already includes many subscriber loop and DCME systems. The unique combination of our SDH and Access Network products will enable PT&T to quickly implement its network construction program."

SDH equipment provides a means to efficiently multiplex (combine) different forms of digital payloads such as voice, data and video on fiberoptic transmission facilities. The SDH transmission standard (or its North American equivalent, "SONET") is the basis of today's telecommunications network architecture. The "Add and Drop" feature permits the flexible utilization and management of fiberoptic networks by allowing the simple addition or retrieval of tributary information of any bandwidth to or from the high-speed fiberoptic "highway".

ECI is a leader in implementing high-speed SDH networks. The ECI Telecom family of SDH products consists of network management software, ADM and line multiplexer systems at STM-1 (155 Mbit/sec), STM-4 (622 Mbit/sec) and STM-16 (2.5 Gbit/sec) transmission rates. The Company already has numerous installations of multiplexers operating in "ring" and "chain" configurations in Europe, the Americas and Asia.

The subscriber loop multiplexers support the extension of voice and/or basic rate ISDN services from a local central office to subscriber premises over 4-wire copper or single fiberoptic cable. Each access multiplexer station will be able to support up to 480 telephone circuits (lines).

PT&T is a publicly traded company on the Manila stock exchange. About 51% of its shares are held by Republic Telecommunications Corporation ("Retelecom") which is owned by Teletronics System Inc. and A2 Telecommunications International Holdings Co., two Philippines based investment groups, and by Korea Telecom which owns 20% of Retelecom.

A provider of integral network solutions, ECI TELECOM designs, develops, manufactures and markets digital telecommunications and data transmission systems, enabling network operators to deliver cost-effective services. ECI TELECOM's systems provide capacity extension, flexibility and management functions to better utilize existing and new telecommunications, data and integrated networks. Its wholly owned TELEMATICS INTERNATIONAL subsidiary designs, manufactures, sells and supports a complete line of wide area networking products designed for voice and data communications applications and networks worldwide.

CONTACT: Bharti Malkani/Kris Otridge Mannie Olswang

Lippert/Heilshorn & Associates, Inc. ECI Telecom Ltd.

212-838-3777 (ext. 106 or 115) 972-3-926-6503