Thomson Participates in the Launch of Major Projects for the Delivery of Television Over ADSL.

Entertainment Editors/Business Editors/High-Tech Writers

PARIS & INDIANAPOLIS--(BUSINESS WIRE)--Feb. 27, 2003

Thomson is at the heart of innovative projects for the

distribution of content and services over ADSL networks

Thomson (NYSE:TMS)(EURONEXT:18453), a worldwide leader along the entire digital video chain, strengthens its position within the arena of broadcast television over ADSL with its participation in two projects launched by the TF1 group and Monaco Telecom.

Through these deployments, Thomson demonstrates that ADSL represents an essential growth opportunity for content owners, enabling them to reach a new category of clientele, as well as for telecommunication operators, allowing them to provide their subscribers with new digital entertainment services.

Thomson Broadband Access Products: an integrated equipment offering

Nextream, a joint venture between Alcatel and Thomson who possesses significant expertise in the field of video stream compression, has developed a new-generation real-time MPEG2 encoder that enables the low bit-rate compression required to broadcast TV content over ADSL. Thanks to this encoder, the quality of video programs distributed over ADSL is equivalent to the quality achieved with satellite transmission, while reducing the bandwidth requirement (bit rate below 2.5 Mbps), a critical success factor for TV over ADSL.

A satellite version (DVB-S) of this encoder is already in use by numerous broadcast operators, enabling them to decrease the number of required transponders. This results in substantial economies in transportation costs.

Program reception represents the final downstream link in the video chain, for which Thomson also provides modems and set-top boxes. The latest generation of modems with embedded software (SpeedTouch(TM) 500 series), enables both the interface with TV services over ADSL for the decoder and high speed Internet access for the PC.

In addition, Thomson has developed the DSL 1500 set-top box that allows TV program reception over ADSL networks. Due to its optimised user friendliness and interactivity, this decoder also enables access to complimentary services such as Video On Demand, thereby extending the ADSL market which has been thus far restricted to PC users.

TV over ADSL with the TF1 Group

Thomson plays a key role in the TF1 group project, named "Dream TV" which encompasses 200 households located in Boulogne Billancourt (France) and in the 15th arrondissement of Paris who can receive an array of 24 TV channels over the ADSL network.

By providing an integrated equipment system to the TF1 group, Thomson positions itself as a primary player in ADSL technologies that enable TV program distribution. This end-to-end distribution system includes MPEG2 encoders developed by Nextream, and ADSL set top boxes and modems developed by Thomson. This offering represents the natural evolution of equipment already developed for satellite, cable and terrestrial networks by Thomson.

The architecture of this pre-deployment guarantees the quality of service required for the broadcast of programming and will subsequently enable the delivery of services such as Video On Demand and digital networked PVR (Personal Video Recorder).

Video on Demand (VOD) over ADSL with Monaco Telecom

Developed jointly with Alcatel, this project, managed by Monaco Telecom, demonstrates the possibilities for delivering new interactive services over ADSL. In this project, 300 Monaco residents will be able to receive Video On Demand services giving them access to a library of movies via their TV sets for an initial period of six months. This new service enables telecommunications operators to extend their offerings beyond high speed Internet to a new category of consumers; namely television viewers who do not own PCs.

Over the past two years, ADSL networks have grown substantially due to the availability of bandwidth while installation costs for ADSL infrastructure have rapidly declined. Consumers have thus developed a taste for high speed Internet, and now, they will be able to access through their TV sets, not only TV programs but also services such as Video On Demand. Offerings will grow with additional services such as on-line gaming.

With these two projects, Thomson demonstrates its expertise and its engagement in the field of large-scale deployments of video over high speed networks. The Group is equally involved with major content and telecommunication operators in the evaluation of similar deployments in other European countries.

Enrique Rodriguez, Senior Vice President, Broadband Access Products, Thomson said: "Broadband video services represent a major stake for the entire digital media industry. The development of solutions for audio and video content distribution over IP networks represents a natural evolution of Thomson's role."

About Thomson

With sales of 10.2 billion Euros (U.S. $ 9.6 billion) in 2002, Thomson (Euronext Paris: 18453; NYSE: TMS) provides a wide range of video (and enabling) technologies, systems, finished products and services to consumers and professionals in the entertainment and media industries. To advance and enable the digital media transition, Thomson has four principal divisions: Content and Networks, Consumer Products, Components, and Licensing. The company distributes its products under the Technicolor, Grass Valley, THOMSON and RCA brand names. For more information: www.thomson.net