Harmonic's New MPEG-2 High Definition Encoder Multiplies Service-Carrying Capacity for Operators; DiviCom(R) MV 500 Significantly Enhances Compression Efficiency While Delivering Superior Video Quality.

LAS VEGAS -- Harmonic Inc. (NASDAQ:HLIT) today introduced the DiviCom(R) MV 500 encoder, a powerful new MPEG-2 high definition (HD) CBR/VBR compression solution. The MV 500 can offer up to a 25% improvement in MPEG-2 HD compression efficiency relative to previous generations and, with new technical innovations, further enhance HD picture quality. The system is ideal for cable, broadcast and satellite operators with a large base of MPEG-2 customers, as well as those broadband network operators with bandwidth into the home that is sufficient to provision an all-HD video, voice and data triple play. The industry's first MPEG-2 HD encoder with native IP support, the MV 500 integrates seamlessly with Harmonic's groundbreaking DiviTrackIP(TM) distributed statistical multiplexing solution to maximize the HD service capacity and availability.

Operators can take advantage of the substantial bit-rate savings offered by the MV 500 to increase the channel-carrying capacity or reclaim valuable bandwidth for additional services. As a result, they are able to implement emerging business models, expand their reach and generate additional revenue. Perhaps most importantly, these objectives can be achieved without replacing other key elements of the existing service infrastructure -- the MV 500 preserves complete compatibility, from the headend to the set-top box in the home.

"The new DiviCom MV 500 is the most advanced MPEG-2 HD encoder available today," said Arnaud Perrier, Senior Product Marketing Manager for Advanced and HD Encoding at Harmonic Inc. "As opposed to rate shaping which can result in a degradation of video quality, the MV 500 makes it possible for cable operators to deliver as many as four HD programs within a single 256-QAM channel. This represents a significant increase in channel density that can accelerate the transition to an all-HD world. Likewise, for terrestrial broadcasters seeking to increase viewership and revenue, the ability to introduce a second HD or additional SD channels in their allocated bandwidth opens up a range of new business models."

Harmonic's LookAhead multi-pass architecture, motion compensated temporal filtering (MCTF) and unique adaptive coding techniques enable the MV 500 to generate superior quality HD video at bit-rates previously unattainable with MPEG-2. For ease of configuration, ongoing management and line-up scheduling, the MV 500 is fully integrated with Harmonic's versatile NMX Digital Service Manager(TM). NMX allows the operator to adjust the program line-up based on time of day and day of week, making it possible to transmit a range of channel configurations from multiple SD channels to a combination of multiple HD and SD channels.

In VBR (variable bit-rate) mode, the MV 500 can be seamlessly added into an existing multiplex utilizing Harmonic's DiviTrackXE(TM), an ASI-based closed-loop statistical multiplexer, to provide an immediate improvement in bandwidth efficiency and video quality. With the native IP capability of the MV 500, operators gain an extra degree of flexibility by leveraging DiviTrackIP, the industry's first distributed, closed-loop statistical multiplexing solution that more efficiently aggregates, compresses and distributes content independent of where the encoders may be located. In both ASI and IP-based multiplexes, the MV 500 can be implemented as part of a mixed SD/HD statmux pool in combination with a variety of DiviCom encoder models.

The MV 500 supports both 1080i and 720p video resolutions as well as various audio formats including MPEG Audio Layer II, Dolby Digital AC-3, AAC, aacPlus and Dolby E. The architecture of the MV 500 enables further video quality and compression enhancements to be easily installed via a firmware upgrade in already-deployed systems using NMX, or via a direct connection on a standalone basis.

Every day Harmonic's encoders deliver thousands of channels of television to tens of millions of households worldwide. From their first deployment a decade ago, DiviCom encoders have consistently set the benchmark for high quality, low bit-rate digital television services. This industry-leading family of SD and HD systems includes the DiviCom MV 100, the most widely deployed multi-codec real-time encoder, the DiviCom Electra(TM) 5000, the world's first multi-service encoder, and the DiviCom Ion(TM), a cost-effective multi-channel encoder with integrated statistical multiplexing. Harmonic's DiviCom systems address a wide range of price/compression performance and functional requirements for broadcast and stored content applications.

About Harmonic Inc.

Harmonic Inc. is a leading provider of digital video, broadband optical networking and IP delivery systems to cable, satellite, telecom and broadcast network operators. Harmonic's open standards-based solutions for the headend through the last mile enable customers to develop new revenue sources and a competitive advantage by offering powerful interactive video, voice and data services such as video-on-demand, high definition digital television, telephony and Internet access.

Harmonic (NASDAQ:HLIT) is headquartered in Sunnyvale, California with R&D, sales and system integration centers worldwide. The Company's customers, including many of the world's largest communications providers, deliver services in virtually every country. Visit www.harmonicinc.com for more information.

This press release contains forward-looking statements within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934, including statements related to accelerating the transition to an all-HD world and opening up a range of new business models for terrestrial broadcasters.

Our expectations and beliefs regarding these matters may not materialize, the features and benefits of the MV 500 described above may not be realized, and actual results could differ materially from those projected. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission including its recent Reports filed on Form 10-K and Form 10-Q. Harmonic does not undertake to update any forward-looking statements.

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