Leading T1 Access Manufacturers Join to Support New Open Systems Standard.

TUSTIN, Calif.--(BUSINESS WIRE)--Jan. 11, 1999--

PairGain, Teltrend, Larus Corporation, and Telco Systems

Commit to Lowering Costs for Customers With

Open Span Termination System (OSTS) Standard

PairGain(R) Technologies, Inc. (Nasdaq: PAIR) today announced, along with three other leading T1 access manufacturers, its support of a new, open systems standard for T1 access. PairGain, Teltrend, Larus Corporation and Telco Systems have all committed to supporting the new Open Span Termination System (OSTS) standard, which was developed by the T1 access equipment manufacturers in response to service providers' demand for equipment compatible with existing central office networks.

The OSTS standard is based on the widely used STS mechanical dimensions and backplane connections, also known as "3192 mechanics." 3192 is a telecommunications standard upon which many systems have been built, including central office shelves and line cards. Many service providers use 3192 equipment to deploy T1 access services with T1 repeater and HDSL technology. The OSTS standard extends the STS standard in bandwidth and addresses new system issues, such as multiplexing and network management capabilities that significantly lower the costs of provisioning T1 service.

One of the largest challenges facing service providers today is the lack of standardization in equipment. Standardized equipment allows for easy integration and maintenance, lowers cost of deployment and saves valuable space in the central office architecture. The OSTS provides the ability to deploy T1 access services with existing 3192 mechanics cards, eliminating the need to purchase proprietary shelves and line cards from various vendors and "future-proofing" the network against new proprietary releases that require expensive upgrades.

"This standards agreement moves the T1 access market forward in a very positive direction," said Bruce Kimble, PairGain's vice president of T1 Access. "We formed the OSTS consortium, so that telecommunications service providers may continue to receive all of the benefits of competition and open systems standards. These benefits include the advantages of backward compatibility with hundreds of legacy products and associated cost savings."

"An open standard for T1 and HDSL plug-ins will allow service providers to protect their investment in 3192 mechanics cards and remain more competitive," said Jack Parker, senior vice president and general manager of High Capacity Products at Teltrend Inc. "We believe adherence to standards will be a key factor to the growth of the T1 access market, and therefore we fully support an open systems approach. We further intend to keep open any improvements we can bring to the OSTS standard."

"The OSTS utilizes a widely accepted platform to increase the effectiveness of the telecommunications service provider's purchasing power. It enables continuing utilization of existing equipment and makes upgrading to new technologies far easier," said Michael Chapman, vice president of Business Development at Larus Corporation. "Through its open T1 architecture, the OSTS standard provides a seamless transition to the future while breathing new life into existing equipment."

"We recognize that gaining a competitive edge through technology is as much a concern for service providers as investment protection. That's why we believe that adding DS3 multiplexing capabilities to T1 access products, which reduces equipment costs, is very important," said Dave Marble, vice president of product marketing at Telco Systems, a division of World Access, Inc. "The OSTS is the perfect approach. It's open and competitive, so it gives service providers the confidence to invest in T1 equipment today, because they know it won't lock them into a single-vendor platform."

The four equipment manufacturers in the OSTS consortium have developed dozens of products that are currently compatible with the new standard. Unlike vendors with "licensed partner programs," the T1 access vendors are striving to create a true open standard that continues to provide the benefits of industry competition. Systems that conform to OSTS will interoperate with existing 3192 shelves and cards, along with other open standards systems. All new products and future upgrades will be backward compatible, eliminating the need to purchase new equipment or proprietary equipment, such as plug-in cards, with each new release.

PairGain, Teltrend, Larus Corporation and Telco Systems have posted the joint specifications for the OSTS on their web sites. These specifications are available to anyone with web access without a need for non-disclosure agreements or other impediments. For more information, go to: www.pairgain.com, www.teltrend.com, www.laruscorp.com, www.telco.com.

Companies and Products

PairGain Technologies, Inc.

PairGain is a world leader in the design, manufacture and marketing of DSL (Digital Subscriber Line) networking systems. In compliance with the new OSTS standard, PairGain has developed the HiGain(R) Wideband System 3190 (WBS-3190), a T1 access system. The WBS-3190 allows customers to multiplex up to 28 DSX-1 connections into a single, protected DS3 with advanced network management capabilities, reducing costs of deployment by up to $4,000 per shelf. Service providers can deploy T1 access services using PairGain's HDSL plug-in cards, or plug-in cards from any other T1 access vendor that complies with either the STS 3192 standard or OSTS. The WBS-3190 is currently being shipped for evaluation purposes. PairGain also intends to produce HDSL plug-in cards for other OSTS-compliant systems being developed by other members of the consortium.

Teltrend Incorporated

Teltrend Inc., based in suburban Chicago, designs, manufactures and markets a broad range of local loop provisioning products used by telephone companies to provide voice and data services over the telephone network. The company's products are sold to the Regional Bell Operating Companies, GTE, Sprint, and other U.S. and International telephone companies. Teltrend's World Wide Web address is http://www.teltrend.com.

Telco Systems

Telco Systems' integrated access solutions that are deployed at the network edge provide organizations with a flexible, cost-effective means of transmitting voice, data, video and image traffic over public and private networks. These products are used in a wide variety of applications by network service providers, such as interexchange carriers, local exchange carriers, government agencies, utilities and wireless providers, as well as by corporations around the world.

Except for the historical information contained herein, the matters discussed in this announcement are forward-looking statements which involve risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices and other factors discussed in the Company's filings with the Securities and Exchange Commission.