ONI Systems Ships Progress Telecom 10Gbps DWDM for Metro Networks; Focused Effort Beats Major Competitors to Market; Progress Telecom Installations Add OC-192.

Business/High Tech Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 9, 2001

ONI Systems(TM) Corp. (Nasdaq:ONIS), a leading provider of all-optical telecommunications equipment for metro and regional networks, today announced general availability of its previously announced 10 Gigabits per second (Gbps) transponder for OC-192 and STM-64 applications.

In December, ONI shipped its first OC-192 products to Progress Telecom, who upgraded its existing metro rings in Miami and Tampa to OC-192 capabilities.

Progress Telecom bridges the gap between inter-exchange carriers (IXCs), Internet Service Providers (ISPs) and other metro and regional service providers by providing a gateway for OC-48 and OC-192 (2.5 Gbps and 10 Gbps, respectively) optical handoffs across long haul and metro backbones. ONI's OC-192 capability, along with its SONET/SDH Multiplexer(TM) and optical bi-directional line-switched ring (O-BLSR) protection scheme, was key to ONI winning the Progress Telecom business. In general terms, this network upgrade enables customers with slower connections the ability to connect to Progress Telecom's broadband network for high-speed optical transport of their telecommunications traffic.

"When ONI was founded, we heard skeptics say that only the telecom giants could deliver sophisticated products like 10 Gigabits to the metro market," said Hugh Martin, president and CEO of ONI Systems. "We have now successfully developed just such a metro product, and are installing this technology at customer sites before our major competitors can ship their own generally-available product. Our customers can take advantage of this time-to-market advantage by quickly providing new services and shortening their own time-to-revenue."

"We already had ONI rings running at OC-48, and have performed an in-service upgrade to OC-192," said Ron Mudry, president and CEO of Progress Telecom. "Not only did we start the New Year offering higher speed services, but we can also offer our customers with slower networks access to Progress Telecom's high-speed broadband services both domestically and through our Latin American gateways in south Florida."

The 10 Gbps OC-192/STM-64 capabilities are the latest addition to ONI Systems' ONLINE family of optical transport platforms, specifically designed for the requirements of metro access, metro core and regional networks. The enhanced speeds enable both U.S. and international service providers in the metro environment to increase the capacity of a single strand of fiber significantly by coupling a four-fold improvement in per channel capacity, compared to OC-48 systems currently deployed.

About Progress Telecom

Founded in 1998, Progress Telecom is a carrier's carrier providing wholesale telecommunications services throughout eastern United States. Progress Telecom incorporates approximately 115,000 fiber miles in its network including over 125 points-of-presence (PoPs). The fiber network serves as the backbone of OC-192 transport that allows customers enhanced data transport capabilities in the Southeastern United States first, second, and third tier growth markets and access to Latin America through its International Gateways. The network's utility-based infrastructure also offers fast local loop access through metropolitan fiber rings that move broadband capacity closer to the customer with 10 gigabit dense wave division multiplexing (DWDM) technology. For more information about Progress Telecom on the Internet go to www.progresstelecom.com

Progress Telecom's parent company, Progress Energy (NYSE:PGN) is a Fortune 500 diversified holding company headquartered in Raleigh, N.C. Progress Energy is one of the top 10 generators of electricity in the United States with more than 19,000 megawatts of capacity and $7 billion in annual revenues. The company's diverse portfolio includes two major electric utility companies, CP&L and Florida Power, as well as NCNG, SRS, Progress Telecom and an important new organization, Energy Ventures, which has been created to manage wholesale energy marketing and trading, merchant generation, fuel properties, as well as barge and rail subsidiaries. These companies serve 2.8 million customers across the Southeast, providing electricity, natural gas, energy services and broadband capacity. For more information about Progress Energy, visit the company's Web site at: http://www.progress-energy.com.

About ONI Systems

ONI Systems(TM) (Nasdaq:ONIS) develops, markets and sells all-optical networking equipment specifically designed to address bandwidth and service limitations of regional and metropolitan networks. Our products allow communications service providers to rapidly build high-capacity metro networks that are flexible, scalable and able to support multiple services on a single platform. Our products include the ONLINE11000(TM), the ONLINE9000(TM), and the ONLINE7000(TM) optical transport platforms, and the SONET/SDH Multiplexer(TM) and Data Multiplexer(TM), and OC-192/STM-64 (10 gigabits per second) interface. The ONLINE(TM) optical transport platforms incorporate the OPTX(TM) operating system for wavelength and service management in optical networks and the OLMP(TM) optical link management protocol suite for internetworking between the optical transport and data or voice switching layers of the network. For more information about ONI Systems and its products, visit ONI Systems' Web site at www.oni.com.

ONI Systems, ONLINE, ONLINE11000, ONLINE9000, ONLINE7000, OPTX, OLMP, SONET/SDH Multiplexer and Data Multiplexer are trademarks or registered trademarks of ONI Systems Corp. All other trademarks are the property of their respective owners.

This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by this section. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, our limited operating history which makes forecasting our future revenue and operating results difficult, our ability to develop and to achieve market acceptance of new products, our dependence on a small number of customers, our ability to add additional customers and our dependence on sole or limited source suppliers for several key components. These and other risks and uncertainties are described from time-to-time in ONI Systems' filings with the Securities and Exchange Commission, including ONI Systems' report on Form 10-Q for the quarter ended September 30, 2000, ONI Systems' final Prospectuses dated October 23, 2000 for its public offerings and other documents on file with the SEC.