NTL Selects DiviCom for New Interactive Cable System; New Digital Broadcasting System Delivers Digital Video and Interactive Data Services for U.K.

LONDON--(BUSINESS WIRE)--Oct. 21, 1998--DiviCom Inc. (Nasdaq:CUBE), a leading provider of compression systems and networking solutions for digital television, today announced that NTL has selected DiviCom to help launch its new digital video cable service.

DiviCom will provide the compression, multiplexing and data transmission systems for the new digital cable network. NTL is a leading telecommunications services provider, offering residential cable telephony and television services for 25 percent of the U.K., covering more than 5.2 million homes.

NTL's digital cable project is an innovative system designed to deliver television and interactive services to cable subscribers. In addition to high-quality video and CD-quality audio, interactive data services are to include web browsing, e-mail, chat, pay-per-view, games and home shopping.

Digital broadcasting for NTL's cable system will be performed using DiviCom compression and transmission systems providing DVB-C compatible and DVB-RC television and data channels to and from the set-top box.

"Adding new capabilities to our system required a vendor who understands digital cable and data services," said Jeremy Thorp, Group Managing Director for Digital Services at NTL. "DiviCom was able to deliver what we need: ATM networking, interactive set-top control and high-quality video."

Based on the new InterSect(TM) interactive set-top controller system designed by DiviCom, interactive data services are to be provided over NTL's existing cable network infrastructure utilizing DAVIC-compatible out-of-band return channels over Hybrid Fiber Coax networks.

DAVIC is the Digital Audio-Visual Council, an international standards group focused on developing open interfaces and protocols that maximize interoperability across countries and applications/services.

Using a centralized "Super Headend" concept, transmission of video, audio and interactive data services will be performed using asynchronous transfer mode (ATM) protocol. Signals are then distributed to NTL's regional cable franchises over NTL's national Synchronous Digital Hierarchy network.

"This NTL project will provide the latest in digital cable services to U.K. subscribers," said Tom Lookabaugh, president of DiviCom. "We thank NTL for putting their confidence in our experience and giving us the opportunity to team with them."

In addition to DiviCom, NTL's new digital cable system draws on products and services from a number of vendors. Other key suppliers include Pace Micro Technology (set-top boxes), PowerTV (middleware for the set-top box), ICL (interactive services and applications), Nagravision (conditional access), Lysis (master scheduler) and Compaq Computer Corporation (Near video-on-demand servers).

As part of the system build-out, DiviCom engineers will integrate DiviCom hardware and software products with those from the above vendors to deliver a complete, end-to-end solution.

About NTL

NTL is the U.K.'s leading integrated communications company, offering alternative telecommunications solutions, broadcast and transmission services. NTL is listed on NASDAQ and EASDAQ and has its head office in Farnborough. NTL provides transmission and broadcast services for the whole of ITV, Channel 4, S4C, Channel 5 and most U.K. independent radio stations.

The NTL group operates the U.K.'s most successful cable telephony and television company under the NTL CableTel brand from six regional businesses passing more than 2.2 million households and over 140,000 business customers. NTL is at the forefront of digital broadcast and telecommunications development, ensuring NTL business and consumer customers will be amongst the first to benefit from digital technology.

DiviCom Inc.

DiviCom develops and integrates products that make digital video networking possible. Products include audio/video encoding, data broadcast solutions, network management systems, consulting and integration services. Based on the MPEG-2, DVB and ATSC international standards, DiviCom's products enable digital video broadcasting over a variety of networks including satellite, wireless, fiber and cable.

DiviCom is a wholly owned subsidiary of C-Cube Microsystems Inc. (Nasdaq:CUBE), and both companies are based in Milpitas, Calif. C-Cube is the leading provider of digital video silicon solutions for the communications, consumer electronics and computer markets. DiviCom can be reached at 408/944-6700 or on the World Wide Web at http://www.divi.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in such statements as a result of economic conditions, market conditions, competitive pressures, varying consumer demand for digital video and interactive digital services, unforeseen delays and difficulties in the integration of various hardware and software products, the completion of the NTL Super Headend, and the commencement of broadcasting and data services as discussed in this press release. In addition to the risk factors described in C-Cube's 10-Ks, Form 10-Qs and other reports. The Company assumes no obligation to update such forward-looking statements.