STMicroelectronics and Telia Research Jointly Announce a Highly Integrated System for Next-Generation VDSL Communications.

GENEVA and STOCKHOLM, Sweden--(BUSINESS WIRE)--Nov. 2, 1999--

Breakthrough in innovative xDSL technology offers 1,000-fold

increase in capacity, compared with existing analog modems

over existing telephone lines for multimedia Internet access,

video-on-demand and future communications services and,

for the first time, full interoperability with

existing ADSL and ADSL.Lite systems

STMicroelectronics and Telia Research AB today announced the successful demonstration of their jointly developed Zipper-VDSL (Very high bit-rate Digital Subscriber Line) system. Representing a significant breakthrough in xDSL technology, Zipper-VDSL will offer users massively increased data carrying capacity over existing telephone lines for applications such as Internet access and video-on-demand. The development of this prototype system follows the announcement made by the two companies in June 1998 to jointly develop a VDSL system for world standardization.

The Zipper-VDSL system, developed by ST and Telia Research offers a data capacity of up to 60 Mbit/s over conventional telephone lines. This represents nearly a 1,000-fold increase in capacity compared with today's 56 kbit/s modems and almost a 10-fold improvement over ADSL (Asymmetric Digital Subscriber Line) technology, which is now starting to be deployed by several telephone operators. Being based upon the same DMT (Discrete Multi-Tone) modulation technique as ADSL and ADSL.Lite, Zipper-VDSL products will ensure full interoperability with ADSL and ADSL.Lite. This means that in the end the Zipper-VDSL could unify ADSL and VDSL markets into a single market.

In addition, Zipper-VDSL technology will allow development of product variants that use only a fraction of the full-rate VDSL bandwidth. This will provide the opportunity for OEMs to produce "VDSL.Lite" modems that will bridge the technological and service-offering gaps between ADSL and VDSL full-rate.

In a single implementation solution, the Zipper-VDSL system can be deployed on a worldwide basis and will ensure spectral compatibility with other services via operator control. This is a mandatory requirement imposed by telecom operators because of unbundled networks, where several network operators share the same cable bundle.

The prototype system is based around a 0.25-micron CMOS digital IC, which has been manufactured by ST and designed in cooperation with France Telecom/Cnet (FT's Research Center) in Grenoble.

The next step for ST and Telia is the development of a fully integrated solution based on ST's advanced deep-submicron CMOS technology. The joint development of a single-chip solution has already been initiated with commercial availability on the mass market scheduled for early in the year 2001.

Commenting on the successful development of the prototype system, Andrea Cuomo, Vice President of Advanced System Technology, STMicroelectronics, said: "With the development of this prototype system, ST and Telia Research have clearly demonstrated the technical feasibility of Zipper-VDSL. ST is fully committed to bringing out integrated circuits, based on this jointly developed technology, to create a standard for next generation VDSL communications."

Claes Nycander, President Telia Research, said: "This is concrete proof of the success of the joint development between the two companies. The combination of Telia Research<180>s experience in telecommunications systems and network operation and ST's advanced silicon process technology and System-on-Chip design expertise has resulted in demonstrable world-leading communications technology. The flexibility offered by Zipper-VDSL, including backward compatibility with ADSL technology, should create wide acceptance by Internet users in this fast growing market."

About STMicroelectronics

STMicroelectronics (formerly SGS-THOMSON Microelectronics) is a global independent semiconductor company, whose shares are traded on the New York Stock Exchange, on the ParisBourse and on the Milan Stock Exchange. The Company designs, develops, manufactures and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices used in a wide variety of microelectronics applications, including telecommunications systems, computer systems, consumer products, automotive products and industrial automation and control systems. Further information on ST can be found at www.st.com.

About Telia

Telia is the leading supplier of telecom-based information services in the Nordic/Baltic region. At the same time, "seamless" pan-European and global services are being realized through powerful alliances and partnerships in Europe and around the world. Annual turnover 1998 reached 51,240 MSEK and the number of employees amounted to approx 30 600.