PCCW Selects Harmonic to Power New MPEG-4 AVC (H.264) Video Service.

Asia's Largest IPTV Operator Expands Service With Ultra-Low Bit-Rate DiviCom[R] Electra[TM] Encoders; now TV Service to Reach Nearly All Households in Hong Kong 

SUNNYVALE, Calif. -- Harmonic Inc. (NASDAQ:HLIT) today announced that PCCW is deploying Harmonic's new DiviCom[R] Electra[TM] 5400 standard definition (SD) MPEG-4 AVC (H.264) encoders for its entire now TV channel lineup. This expansion enables PCCW -- the world's largest IPTV operator with more than 700,000 subscribers -- to add services and extend its reach in Hong Kong. Preferred by leading telco operators around the world, Harmonic's Electra 5000 MPEG-2 encoders were also recently implemented at PCCW as part of a channel expansion.

The now TV service, launched in 2003, is part of PCCW's comprehensive quadruple platform offering that includes telephony, broadband Internet access and mobile services. The addition of new channels and transition to an on-demand viewing paradigm are driving PCCW to implement the Harmonic H.264-based compression solution which can support more bandwidth-intensive services and multiple television sets. Bandwidth improvements available with H.264 also enable PCCW to significantly increase the number of subscribers that can access the service over the DSL network in comparison to MPEG-2.

"The Harmonic Electra 5400 encoders deliver the performance and picture quality we needed for our new H.264 service," said Dominic Leung, Managing Director, Television & Content at PCCW. "As we continue to expand our now TV service and offer more programming, video-on-demand and interactive gaming, our video network must be flexible, scalable and more efficient. Harmonic's high performance video headend solutions make it possible to better utilize the available bandwidth for these new services, opening up new revenue opportunities and enabling PCCW to provide a more compelling service to our subscribers."

"PCCW is an IPTV innovator that continues to lead the way in delivering high quality video services via the telecom network," said Patrick Harshman, President and CEO of Harmonic Inc. "By adding H.264-based services to their lineup, PCCW can further enhance the service by lowering bandwidth requirements for TV programming and thus support on-demand services and additional TV sets. The density of the Electra 5400 platform offers additional cost savings benefits and the flexibility to easily scale the service."

Harmonic's IP-based Electra 5400 offers PCCW superior MPEG-4 video quality at ultra-low bit-rates to improve bandwidth efficiency, while also providing a dense one rack-unit platform that supports up to four channels of simultaneous full resolution video. The recent implementation at PCCW also includes Harmonic's NMX Digital Service Manager[TM], a versatile solution for automated management of service operations and scheduling.

To find out more about PCCW, please visit www.pccw.com.

About Harmonic Inc.

Harmonic Inc. is a leading provider of versatile and high performance video solutions that enable service providers to efficiently deliver the next generation of broadcast and on-demand services including high definition, video-on-demand, network personal video recording and time-shifted TV. Cable, satellite, broadcast and telecom service providers can increase revenues and lower operational expenditures by using Harmonic's digital video, broadband optical access and software solutions to offer consumers the compelling and personalized viewing experience that is driving the business models of the future.

Harmonic (NASDAQ:HLIT) is headquartered in Sunnyvale, California 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 within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934, including statements related to: enabling PCCW to add services and extend its reach, the transition to an on-demand viewing paradigm, enabling PCCW to significantly increase the number of subscribers that can access its service, continuing to expand the now TV service, and further enhancing PCCW's service.

Our expectations and beliefs regarding these matters may not materialize, and actual results could differ materially from those projected. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission including its recent Reports filed on Form 10-K and Form 10-Q. Harmonic does not undertake to update any forward-looking statements.

EDITOR'S NOTE - Product and company names used herein are trademarks or registered trademarks of their respective owners.