Hypercom Safeguards Integrity of Internet Telephony Traffic During Peak Network Utilization; Automatic Bandwidth Reallocation Functionality Added to IEN Products for Carriers, ISPs and End-User Organizations.

PHOENIX--(BUSINESS WIRE)--March 30, 1998--Overcoming one of the largest obstacles when sending voice traffic over the Internet or frame relay, Hypercom Network Systems has developed a technique that reallocates bandwidth between voice and data calls during peak periods of network utilization. The new technique, Dynamic Rate Change, will improve Internet telephony reliability while decreasing costs.

Dynamic Rate Change Overcomes Obstacles to Packetized Voice

Under pressure to reduce operating costs, users and service providers are embracing the concept of sending voice, fax and video over low-cost packet-based networks traditionally used only for data. Hypercom's Dynamic Rate Change addresses the two key challenges:

-- Ensuring reliability: If the network suddenly gets congested with voice and/or data calls, Dynamic Rate Change reallocates network bandwidth in real-time to ensure that voice calls are not dropped because of "traffic jams" on the wide area network.

-- Not overpaying for bandwidth: Without a feature such as Dynamic Rate Change, users would have to overpay for bandwidth in order to accommodate brief periods of peak network traffic. With Dynamic Rate Change, they can get by with less since the bandwidth can be shared between calls while the calls are in progress and as new ones are initiated.

How It Works

Dynamic Rate Change is accomplished via variable rate compression performed by the Digital Signal Processor (DSP) software in IEN devices. The DSP adjusts the amount of bandwidth given to each call in accordance with user-defined priorities and in response to network congestion. For example, a voice call may be allocated 9.6 kilobits per second of bandwidth when it is initiated. If the network becomes more heavily trafficked during the call, the IEN device will automatically scale back slightly on the bandwidth allocated to that call, in increments of 800 bits per second as required to distribute available bandwidth among all the active calls and prevent any from being dropped.

"With most competitive solutions, once the network gets congested, it's too late to do anything about it. All network managers can do is give certain types of traffic priority in advance, not adjust how much bandwidth each type of call gets once it's in progress," says Paul Wallner, President of Hypercom Network Systems. "Our focus is two-fold: first, we do everything possible to prevent congestion. But, if congestion occurs, our equipment reacts in real-time to alleviate the problem as it's happening."

With Dynamic Rate Change and Hypercom's award-winning Quality of Service techniques, Optimal Access, IEN devices are constantly working with the wide area network to prevent congestion and maximize quality. In frame relay networks, Dynamic Rate Change interacts with the congestion warnings sent between IEN devices, called BECN and FECN signals (backward explicit congestion notifications and forward explicit congestion notifications) to coordinate between the flow of calls onto the network and the amount of bandwidth assigned to each.

Availability

Dynamic Rate Change will be available for IEN users as of May 1998.

Total Packetized Voice: Reliability, Calling Features and Scaleability

With its increasing focus on serving carriers and ISPs along with user corporations, Hypercom(R) is advancing the packetized voice market with carrier-class gateways (up to 960 circuits supported) that scale well and support traditional calling features such as call forwarding, call accounting, 4-digit dialing plans, and highly graphic, integrated management. A cornerstone for scaleable, evolving networks, a single IEN device can support frame relay, IP, ATM and other services; perform multiprotocol routing and multiservice switching; and act as a hub, CSU/DSU, dial back-up modem, dual power supply and gateway/protocol converter.

Hypercom Corporation

Hypercom Corporation is a leading supplier of point-of-sale (POS) payment systems, enterprise networking solutions and client/server software. Phoenix, Arizona-based Hypercom sells its products in more than 50 countries worldwide. Hypercom's (HYC) common stock is traded on the NYSE.

Certain matters discussed within this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although management of Hypercom believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include industry, competitive and technological changes; risks associated with international operations and foreign currency fluctuations; the composition, timing, and size of orders from and shipments to major customers; inventory obsolescence; market acceptance of new products and other risks detailed from time to time in Hypercom's SEC reports, including the company's prospectus dated November 13, 1997. -0-

Note to Editors: Hypercom is a registered trademark of Hypercom Corporation.

CONTACT: Hammond Farrell Inc.

Liza Kurtz, 212/995-5680, ext. 210

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