Harmonic Wins Mexico's First Open Cable Headend Deployment; Cablemas Selects Open Solutions from New Harmonic Product Line to Boost Technical Flexibility.

Business Editors/High-Tech Editors

SUNNYVALE, Calif.--(BUSINESS WIRE)--July 17, 2000

Harmonic Inc. (Nasdaq:HLIT) today announced it has been selected by Cablemas to deploy Mexico's first open digital headend solution. Cablemas, Mexico's second largest cable provider, will be able to deliver high quality digital video to its subscriber base and soon plans to launch innovative interactive services.

Cablemas is the first customer to benefit from the combined technologies offered by Harmonic and DiviCom since their merger on May 3, 2000. The Cablemas deployment showcases a seamless, integrated solution that streamlines the delivery of digital cable television service. The combined product line delivers a "best of breed" system that enables a DVB-compliant conditional access system and digital set-top-boxes.

Cablemas is one of several North American cable operators to select Harmonic's open solutions for the digital headend, including MediaOne(R), Cablevision(R), GTE(R) and Time Warner Cable(R). In addition, the Cablemas deployment follows four recent Harmonic wins in the region -- SATEL TV, a Panama-based satellite uplink facility, Colombia's primary television network INRAVISION, WHTV in Puerto Rico, Television Distribution Systems (TDS) in Curacao, and ACOM in Brazil.

"We are pleased to lead Mexico into this new era of digital cable. With open solutions, we can select the market's best vendors, and rely on Harmonic to integrate them together in a cohesive, seamless solution," said Enrique Alvarez, Chief Technology Officer of Cablemas. "Its exceptional video quality, superior integration and support, and flexible solution made Harmonic the obvious choice."

Forming the backbone of the Cablemas headend will be Harmonic's Convergent Systems (CS) division techology: TransRater stream processing solution and the TRANsend platform for encoding/remultiplexing. In addition, Harmonic's Broadband Access Network (BAN) division will deliver its InterSect(TM) interactive set-top controller system to provide high speed Internet.

The TransRater stream processing system will enable Cablemas to customize MPEG-2 compressed video content as it passes through the headend to the consumer set-top box. With TransRater, Cablemas will insert logos, local programming, and advertisements directly into the video stream, all within the digital domain.

TRANsend, Harmonic's digital broadband delivery system, is an integral part of the Cablemas deployment. It enables the cable provider to deliver advanced digital video and high-speed data services by combining inputs from a variety of sources for seamless integration and delivery. TRANsend is a single, flexible, compact platform that supports multiple network interfaces, including ASI, ATM, and IP. With TRANsend, Cablemas can customize content by grooming and remultiplexing high-speed data and MPEG-2 digital video.

"Cablemas' choice signifies a dramatic shift in the type of service cable operators will deliver to subscribers in Latin American and demonstrates the viability and attractiveness of open architecture," said Yaron Simler, Vice President of Marketing for Harmonic's CS division. "We offer Cablemas a flexible solution that includes the most advanced head-end equipment and set-top boxes. In the end, it results in superior performance and the ability to adapt quickly to provide new applications for subscribers."

About Harmonic Inc.

Harmonic is a leading provider of innovative broadband solutions that deliver video, voice and data to communications providers around the world. Harmonic's technically advanced fiber optic, digital video and IP data delivery systems enable network operators to provide a range of interactive and advanced digital services that include high-speed Internet access, telephony, digital video, HDTV, video & audio streaming, and video-on-demand.

Headquartered in Sunnyvale, Calif., Harmonic employs approximately 950 people and operates more than 15 R&D and sales & system integration centers globally. Harmonic's customer base includes the world's largest communications providers. Harmonic's stock is traded on the Nasdaq stock market under the symbol "HLIT." For more information, check the company's website at www.harmonicinc.com.

This press release contains forward-looking statements, including, but not limited to, Cablemas' planned delivery of new services, the capabilities of the Harmonic products to be deployed in Cablemas' headend, the creation and launch of new content and interactive services, and the performance and adaptability of Harmonic's solution, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In addition, 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, including 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.