Leading Cable Operators Choose Harmonic for Video-on-Demand; Narrowcast Services Gateway and GIGALight DWDM Systems Deliver VOD for Seven of the Top Eight MSOs.

Business Editors/High-Tech Writers

SUNNYVALE, Calif.--(BUSINESS WIRE)--Dec. 2, 2002

Harmonic Inc. (Nasdaq:HLIT) today announced that seven of the top eight Multiple Service Operators (MSOs), those with one million or more subscribers, are using its products for their video-on-demand (VOD) deployments. Harmonic's Narrowcast Services Gateway(TM) (NSG) and GIGALight(TM) DWDM transmission system, which afford a high degree of architectural flexibility and scalability, have eliminated key technical and economic barriers previously associated with delivering narrowcast services. The ability to increase network capacity as subscriber demand grows while reducing both deployment and operating costs is making VOD services viable for operators of all sizes. As a result, Harmonic has emerged as a market leader and platform of choice for VOD transport and distribution.

Since the mid-1990s, VOD has been promoted as an important way for cable networks to differentiate their services, grow their subscriber base and increase revenue. Only in the last two years, with the introduction of new open standards-based systems -- such as the NSG and GIGALight -- and architectures, has the cost-per-digital stream become compelling enough to move the service out of trials into broader deployment.

"2002 has been the Year of Video-on-Demand. Harmonic has been at the forefront of the deployment of VOD systems and the adoption of Gigabit Ethernet transport and switching," said Anthony J. Ley, president and chief executive officer of Harmonic. "The combination of our Narrowcast Services Gateway and GIGALight DWDM transport systems gives cable network operators a very effective model for delivering content of any type on-demand. As we enter the next phase of deployments, it is very straightforward for our customers to duplicate and scale their networks to support more markets and more simultaneous subscribers."

Harmonic's NSG, which integrates seamlessly into any cable network, is a critical element of recent VOD deployments as it processes streams from multiple servers as well as performs multiplexing, program filtering, routing, QAM modulation and upconversion. The NSG brings two major advantages to the cable operator. First, it allows them to leverage the efficiencies and economics of Gigabit Ethernet/IP for transporting VOD streams from the remote server to the local hub. Second, by converting VOD streams into a format suitable for distribution over the existing HFC (hybrid fiber-coax) infrastructure, it lowers the cost of the service.

Harmonic's GIGALight DWDM transport system can be used in conjunction with the NSG when cable operators want to take advantage of a distributed Gigabit Ethernet topology. GIGALight is a scalable system that enables the flexible and cost-effective transmission of narrowcast services such as VOD, high-speed Internet data and IP telephony.

Harmonic Supports End-to-End Content-on-Demand Systems

From the headend through the last mile, Harmonic's VOD transport and distribution systems maximize cable network efficiency and flexibility while driving down the associated costs. The NSG interoperates with the leading video servers--giving MSOs the freedom to choose the right server for their needs--and can be centralized with the video server or distributed regionally depending on the network architecture. The NSG is also compatible with leading conditional access systems and an extensive range of set-top boxes, providing operators a number of choices to secure their programming while leveraging their existing system investments.

The use of Gigabit Ethernet transport and switching allows operators to gain further economic benefit and architectural flexibility by deploying standards-based networking equipment such as commonly available Ethernet switches and routers. Harmonic's GIGALight DWDM transmission system delivers bandwidth, with a maximum of 32-wavelengths on a single fiber, targeted by region or service. In the last mile of the network, Harmonic's nodes minimize deployment complexity by allowing both broadcast and narrowcast services to be distributed across the same physical network. As demand increases or the subscriber base grows, operators can cost-effectively scale bandwidth incrementally by adding more GIGALight transmitters as well as by segmenting their existing Harmonic nodes. In practical terms, Harmonic enables operators to deliver VOD services to communities of all sizes.

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, Calif. 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 including, but not limited to, duplicating and scaling networks to support more markets and subscribers, allowing operators to gain further economic benefits and architectural flexibility, and scaling bandwidth by adding more GIGALight transmitters as well as segmenting nodes, 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.