First Austrian Cable Operator to Adopt Harmonic's Transend Complete Digital Headend System; Kabelsignal Uses a TRANsend Digital Headend to Relay International Channels.

CHICAGO--(BUSINESS WIRE)--June 14, 1999--

Harmonic Inc. (Nasdaq:HLIT) today announced that Kabelsignal, one of Austria's leading cable operators, is the first cable operator in Austria to choose Harmonic's TRANsend(TM) digital headend to create customized channel line-ups to target Austria's foreign language community.

Using the TRANsend digital headend, Kabelsignal will be able to digitally receive seven television services from different satellite transponders, encode locally originated video into MPEG-2 streams and reassemble them into their broadcast signal - saving large amounts of bandwidth due to the digital compression, without compromising the quality in transmission.

"When we wanted to meet the needs of our foreign language community, we needed a cost effective solution that would easily manage our channel line-ups," said Dr. Karl Karner, chairman, Kabelsignal. "We have found that TRANsend suits our requirements perfectly, and gives us the flexibility we require as the market for digital cable develops."

All encoding, multiplexing and QAM-modulation of the content will be via the TRANsend digital headend, with the modulated channel line-up then transmitted over the existing hybrid fiber-coaxial (HFC) network to set-top boxes. Installing the TRANsend products will make Kabelsignal the first cable operator in Austria to create a customized digital TV service.

"This TRANsend installation in Austria will be a significant move for Harmonic into the European digital market," said Jan Van Hoecke, European general manager, Harmonic Inc. "Enabling European cable operators to easily customize program line-ups and optimize their bandwidth using TRANsend gives them an advantage when competing for subscribers in Europe's highly competitive broadband market."

About TRANsend

The TRANsend product line was launched to provide operators with innovative ways to deploy advanced broadband services. The TRANsend system is being used by leading operators worldwide, including Videotron, Canada's second largest cable operator, TV Cabo in Spain, Image Communications in Canada, and has been selected by Golden Channels and Co., Israel's largest cable television operator.

Harmonic's TRANsend digital headend is comprised of several components, including MPEG-2 encoders and multiplexers, MPEG-2 content receivers, and the video transmission platform that serves as the headend's building block. The compact and integrated headend can be flexibly configured to operators' individual needs via Harmonic's NETWatch(TM) Element Management System.

The TRANsend digital products are compatible with all relevant worldwide and domestic standards, including ITU/SCTE (International Telecommunications Union/Society of Telecommunications Engineers), DVB (Digital Video Broadcast) and DAVIC (Digital Audio Video International Communication).

About Kabelsignal

Kabelsignal is the largest CATV operator in the province of Lower Austria with more than 36,000 subscribers. In addition to Maria Enzersdorf, Kabelsignal operates in Styria, Schladming, Rohrmoos, and in the Ausseerland. A subsidiary of EVN AG, Kabelsignal currently offers cable television and Internet access and will offer cable telephony in the near future.

About Harmonic Inc.

Harmonic designs, manufactures and markets digital and fiber optic systems that deliver video, voice and data over cable, satellite and wireless networks. These advanced solutions enable cable television and other network operators to provide a range of interactive broadband services that include high-speed Internet access, telephony and video-on-demand.

Harmonic is headquartered in Sunnyvale, Calif., where it also operates an R&D center and a manufacturing facility. The company also operates its Harmonic Data Systems subsidiary and an R&D center in Israel. In addition, the company maintains several sales and support centers worldwide. Harmonic is ISO 9001-certified and its stock is traded on the Nasdaq stock market under the symbol "HLIT." Visit www.harmonicinc.com on the web.

This press release contains forward-looking statements, including, but not limited to, the ability of Kabelsignal to receive digital signals, encode local video and multiplex and modulate the content, and creation of the first customized digital TV service in Austria, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth in documents that Harmonic files with the SEC, specifically reports on Form 10-K and 10-Q.

Note to Editors: Product and company names used here are trademarks or registered trademarks of their respective companies.