Paradyne Introduces the Industry's First SHDSL Frame Relay over DSL System with Service Level Management.

Business Editors/High-Tech Writers

LARGO, Fla.--(BUSINESS WIRE)--May 24, 2001

The New SHDSL FrameSaver DSL System Combines Low-Cost Standards-Based

DSL Access with ATM Quality of Service and End-to-End Network

Management

Paradyne Networks, Inc. (Nasdaq:PDYN), a worldwide provider of digital subscriber line (DSL) and service level management (SLM) equipment solutions, today introduced the 9788 SHDSL FrameSaver(R) DSL system -- the industry's first service level managed Frame Relay over DSL (FRoDSL) system supporting the new global industry standard, G.shdsl (ITU-T G.991.2). This new combination enables mass deployment of business-class DSL services at a lower cost, while maintaining the reliability and manageability of today's traditional frame relay services.

With the new 9788 FrameSaver DSL CSU/DSU and router products, service providers can offer frame relay customers the advantage of easy installation and lower cost, standards-based DSL access, while maintaining the ability to offer service level agreements (SLAs). This ability to monitor quality of service (QoS) is a key component to migrating business customers to adopt DSL technology in mission-critical frame relay networks. Cost advantages of DSL access and the ability to install frame relay systems without costly truck rolls allow service providers to penetrate new market segments with additional services, reduce operational expenses and increase revenues.

"With G.shdsl enabling connection speeds up to 50 percent higher and extending reach up to 20 percent longer than current technologies, service providers will be able to reach a larger addressable market," said William Cobb, Paradyne's vice president of business-class access solutions. "Our new SHDSL FrameSaver DSL system enables service providers to offer customers an easily installable device for their mission-critical networks that will give them the `best of both worlds' with the end-to-end service level management benefits of frame relay and the lower cost and higher speeds available with SHDSL."

The new FrameSaver 9788 DSL CSU/DSU and router operate with Paradyne's multiservices Hotwire(R) GranDSLAM (DSL access multiplexer) as well as any other vendor's DSLAM that is compatible with the new ITU-T G.992.1 standard.

About the Paradyne FrameSaver DSL Family

The FrameSaver DSL family is a robust frame relay access system, which gives service providers a cost-effective platform for delivering business-class DSL services. Unique system features enable lower cost customer installation of the endpoints, radically reducing service installation and turn up costs. Advanced diagnostic and management features enable Network Operations Center (NOC) personnel to quickly diagnose, isolate and correct problems remotely. The system's capability to pinpoint faults on the end-to-end network, including the customer premises equipment, leads to rapid repair and reduces the need for time consuming and costly truck rolls. Service providers can perform non-disruptive end-to-end loopbacks to quickly verify circuit operation - a unique capability of the FrameSaver solution that is key in the provisioning and maintenance of DSL frame relay circuits. Additionally, the solutions' ability to continually monitor the network enables the service provider to proactively fix problems prior to affecting customers' mission critical applications.

The G.shdsl based FrameSaver DSL system extends ATM to the customer premises, where it is converted to frame relay. This capability provides ATM QoS, allowing service providers to support stringent performance levels required by mission-critical frame relay networks.

The FrameSaver DSL system also includes an optional software upgrade capability providing service level reporting functionality required for premium managed services offerings, a benefit enabled by Paradyne's OpenLane(R) Network Management System.

Pricing and Availability

The SHDSL FrameSaver DSL endpoints will be available in July, starting at $995.

About Paradyne

Paradyne is a leading developer of carrier class, high-speed network access solutions. A recognized market leader in digital subscriber line (DSL) and service level management (SLM) solutions, Paradyne markets its award-winning Hotwire DSL, ReachDSL(TM) and FrameSaver Service Level Management systems to service providers and business customers. More than 13,000 Hotwire DSL Access Multiplexers (DSLAMs) have been deployed around the world. Paradyne has shipped over 100,000 ports of its unique ReachDSL solution, giving carriers the ability to deliver broadband over almost any copper lines, even those that are very long or severely impaired. Paradyne's SLM solutions have been deployed into mission-critical enterprise networks by the leading carriers, including AT&T, Bell Canada, Broadwing, Intermedia, SBC, Sprint, Verizon and WorldCom.

Paradyne is headquartered in the Tampa Bay area. More information is available by calling 1-800-PARADYNE (U.S. and Canada), 1-727-530-8623 or visiting www.paradyne.com.

Information about Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements are made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. Expressions of current expectations related to revenue, earnings and future business prospects, including, without limitation, "expects", "estimates", "forecast", "continue" or "plans", reflecting something other than historical fact, are intended to identify forward-looking statements. The following factors, among others, could cause Paradyne's actual results to differ materially from those described in the forward-looking statements: the timing and amount of expense reduction; the ability to successfully negotiate a new bank line of credit; the uncertainty of litigation, including putative shareholder class actions; a reliance on international sales; rapid technological change could render Paradyne's products obsolete; the uncertain acceptance of new telecommunications services based on DSL; substantial dependence on network service providers who may reduce or discontinue their purchase of products or services at anytime; the timing and amount of, or cancellation or rescheduling of, orders of Paradyne's products to existing and new customers; possible inability to sustain revenue growth or profitability; dependence on only a few customers for a substantial portion of Paradyne's revenue; highly competitive markets; dependence on sales of access products to Lucent Technologies; dependence on sole and single-source suppliers; and a long and unpredictable sales cycle. For a detailed discussion of these and other factors that could cause Paradyne's actual results to differ materially from those described in the forward-looking statements, please refer to Paradyne's most recent Form 10-K and other filings with the Securities and Exchange Commission.

Editor's Note: Visit Paradyne's virtual pressroom at www.paradyne.com/news_n_events/press_room for product images and/or additional information. Product availability and pricing subject to change without notification. Hotwire Connected, ReachDSL, Smart Room, Tripleplay and TruePut are trademarks of Paradyne Corporation. ACCULINK, COMSPHERE, ETC, Hotwire, FrameSaver, NextEDGE, MVL, OpenLane, Paradyne, the Paradyne logo and Performance Wizard are registered trademarks of Paradyne Corporation. All other service marks and trademarks are the property of their respective owners.