ECI Telecom Chosen by Central Telegraph, Russia, to Supply Its Regional SDH Network; Three Year Framework Agreement Value: US$ 8 million.

PETAH TIKVA, Israel--(BUSINESS WIRE)--Dec. 14, 1998--ECI Telecom Ltd. (NASDAQ/NM symbol: ECILF) announced today the signing of a contract with Central Telegraph, Russia, for the supply of its SDH network solutions.

Under the contract, valid for three years, and valued at US$ 8 million, ECI Telecom will supply Central Telegraph with its SDM-16, 2.5 Gbit/s Add/Drop Multiplexers, SDM-4, 622 Mbit/s Add/Drop Multiplexers and SDM-1, 155 Mbit/s Add/Drop Multiplexers together with ECI Telecom's network management equipment featuring high level management and full maintenance of the network. The equipment will be deployed by Central Telegraph to build a new regional SDH network that will connect half a million subscriber lines in the Moscow region.

First orders have already been received within this contract and shipments began in the fourth quarter of 1998.

During meetings held in Moscow last week between Mr. David Rubner, ECI Telecom's President and CEO and with Mr. Roubtsov of Central Telegraph, both companies expressed plans for increased activities which include the expansion of the SDH regional network.

ECI Telecom's SDH network solutions incorporate the full range of field-proven equipment and support necessary for backbone, trunk and SDH Access applications transmitting at the STM-1, STM-4, STM-16 and 10 Gbit/s rates.

ECI Telecom has supplied customized SDH networks to dozens of operators around the world. Many of these incorporate ECI Telecom's integrated solutions and Turn-key services.

The long list of ECI Telecom - supplied SDH projects in Russia includes: Moscow Telephone Network Company, MGTS, Metropolitan Network of MTU Inform, Vimplecom BeeLine Cellular SDH network, Global ONE's SDH network, as well as networks in the cities of Novogrod, Irkutsk, Izevsk and Kirov. ECI Telecom has additionally supplied SDH projects in several CIS countries such as Ukraine, Belarus, Georgia, Azerbaijan, Kazakhstan and Kyrgizstan.

About Central Telegraph:

Open Joint Stock Company (OJSC) Central Telegraph is the oldest telecommunications operator in Russia. Initially a provider of telegraph and telex services, Central Telegraph has become a provider of telephone services and has recently entered the data transmission market as well. The digital overlay network, Centel, being created by OJSC Central Telegraph is poised to become the third telephone network in the Moscow Region in terms of its volume and the most up-to-date one among the major networks in the region in terms of the equipment and technologies used and the range of services provided.

About ECI Telecom:

A provider of integrated 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 expansion, flexibility and management functions to more effectively utilize existing networks for voice, data, wide area and integrated networks.

This press release and additional information about the Company, is now available on ECI TELECOM's site on the World Wide Web: http://www.ecitele.com.

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Certain statements contained in this release, may contain forward-looking information with respect to plans, projections or future performance of the Company, the occurrence of which involves certain risks and uncertainties including but not limited to, product and market acceptance risks, the impact of competitive pricing, product development, commercialization and technological difficulties and other risks detailed in the Company's filings with the Securities and Exchange Commission.