PairGain Announces Industry's First Single-Chip DMT ADSL Processor.

TUSTIN, Calif.--(BUSINESS WIRE)--Jan. 21, 1998--

Company's FALCON Chip Is The Lowest Power, Most Integrated

DMT ADSL Solution Available; Enables Wide Scale Deployment

Of Splitterless, Standards Compliant DSL-based Services

PairGain Technologies Inc. (Nasdaq: PAIR) Wednesday announced the beginning of field tests and demonstrations for its FALCON DMT RADSL (Discrete Multi-Tone Rate-adaptive Asymmetric Digital Subscriber Line) chip, the industry's first single-chip DMT ADSL processor. The PairGain-developed DMT transceiver sets the stage for the commercial rollout of DMT-based ADSL services, being driven primarily by consumer demand for high-speed Internet access.

PairGain Approach Enables Mass Market Deployment

The FALCON chip will support DMT ADSL and "splitterless ADSL", or G.lite, a standard currently under development by the International Telecommunication Union, to simplify modem deployment by eliminating customer premises splitter installation for simultaneous data and analog voice connections, making ADSL modems as easy to install and use as analog modems. There will be no need for additional equipment, modified wiring, or a telephone company installer to visit the consumer's home to start up the service. ADSL will allow the user to hold a phone conversation and access the Internet simultaneously over the same telephone line. The user's computer will be connected to the Internet continuously, with no need to dial in, as is required by today's analog modems.

PairGain's FALCON is capable of transferring data, voice and video at rates over 8 Mbps downstream and 1 Mbps upstream, all over a single copper telephone line. Data rates are adjustable in increments of 32 kbps to enable the longest possible reach. Multi-megabit data rates will enable next-generation Internet applications for consumers, such as Internet telephony and video, distance learning, and telemedicine.

"PairGain has been developing this DMT ADSL technology for the past four years," said Howard Flagg, President of PairGain Technologies. "This version of FALCON is in full production and will accelerate deployment of ADSL technology throughout the industry."

Breakthrough Chip Design

In addition to setting new standards for power consumption and flexibility, the FALCON DMT ADSL chip requires less than 0.55 watts for operation, shattering the low power barrier of other DMT ADSL offerings. The FALCON chip includes all the digital circuitry necessary to implement a DMT transceiver per T1.413, the ADSL standard. It includes standard-compliant DMT modulation, framing, error correction, interleaving and interleave RAM in a single 160-pin PQFP package. The chip also includes advanced system management features, which allow custom features to be easily deployed in the product development stage.

FALCON's high level of integration significantly reduces the chip count needed to implement system-level DMT RADSL products. This lowers the cost of implementation, and makes the design of higher density products feasible, both of which are vital to the development of a consumer DSL market. In accordance with PairGain's design philosophy, the FALCON provides a complete and simple "drop-in" digital solution, with everything needed to implement a standards-compliant DMT ADSL connection on a single chip.

"PairGain's microelectronics leadership has always been the cornerstone of our strategy to provide leading edge xDSL products," said Flagg. "The introduction of FALCON provides PairGain with a technological and time-to-market advantage."

ASIC vs. DSP Implementation

PairGain's FALCON chip was designed by PairGain's in house microelectronics team using a programmable, full-custom ASIC (Application Specific Integrated Circuit) optimized for DMT processing rather than a traditional, general-purpose DSP (Digital Signal Processing) approach. By designing the chip exclusively for DMT functionality, PairGain achieved full-featured functionality without sacrificing on transistor count, chip size and power dissipation. FALCON has been designed to be far more programmable than traditional ASICs, allowing straight-forward adaptation to support future ADSL standards or extensions. The traditional DSP approach starts with a general purpose microchip and requires more programming and additional chips for maximum DMT performance.

System-Level Products

PairGain plans to integrate its DMT ADSL technology into several of its own product lines as well as those of strategic partners. Forthcoming PairGain products include a next generation xDSL access system that will be capable of supporting thousands of subscribers simultaneously. FALCON will also be deployed in next-generation Megabit Modems that will be significantly smaller and higher performance than any xDSL modem available today. PairGain also intends to make FALCON available to strategic partners to develop DMT ADSL modules for telephony switching equipment and digital loop carrier systems. FALCON will also allow for low cost implementations such as internal PC-card modems or designs on the PC motherboard itself.

Interoperability

PairGain Technologies intends to conduct interoperability testing with several DMT ADSL vendors. PairGain also intends to participate in any formal, public efforts or testing towards interoperability.

ComNet Demonstration

PairGain will demonstrate a FALCON-based DMT RADSL Megabit Modem at ComNet in Washington D.C., Jan. 27-29, 1998, in Booth No. 1246.

Availability

Announcements regarding the release of PairGain's system-level DMT ADSL products will occur in coming months. PairGain also plans to license its DMT ADSL technology directly to select strategic partners; and is currently in negotiations with a major communications component vendor to distribute the chip.

About PairGain Technologies

PairGain Technologies is the market leader in the design, manufacture and marketing of advanced xDSL communications systems. PairGain's products allow network service providers and organizations with private networks to rapidly deploy high-speed data, video and voice services to end users over the existing infrastructure of copper telephone lines. PairGain's HiGain, PG-Plus, PG-Flex, Megabit Access and campus area network products are marketed under the trademark CopperOptics, indicating their ability to provide fiber optic quality transmission over the "last mile" in both public and private networks worldwide. -0-

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.

CONTACT: PairGain Technologies

Kim Gower, 714/730-2330

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