Video Networks and Harmonic Complete Migration to World's First MPEG-4 AVC Broadcast TV Service; Landmark Development Shapes Future of Broadband Television and Reinforces DiviCom(R) MV 100's Market Leadership.

SUNNYVALE, Calif. & LONDON -- Harmonic Inc. (Nasdaq:HLIT), a leader in digital video compression and IP delivery systems, today announced that Video Networks Limited (VNL), provider of the HomeChoice entertainment and communications service, has completed the migration of its broadcast line-up to MPEG-4 AVC (H.264), becoming the world's first revenue-generating broadcast television service delivered exclusively using an advanced compression technology. This landmark event in the broadband TV industry, enabled by Harmonic's versatile DiviCom(R) MV 100 multi-codec encoding platform, definitively validates the promise of MPEG-4 AVC and the power of IPTV. It also affirms the technology and video quality leadership that has made the ultra-low bit-rate MV 100 the market's most widely deployed advanced codec-ready encoder.

In early 2004, VNL deployed Harmonic's high performance DiviCom MV 100--the industry's first broadcast-grade, real-time, multi-codec compression platform--and its own multi-codec set-top box for the new HomeChoice IPTV service. This gave VNL the ability to provision differentiated video services with MPEG-2 and build a strong foundation for future growth, then at a later date install the MPEG-4 AVC software option to cost-effectively extend its geographical reach and service-carrying capacity. Since April 2005, VNL has incrementally migrated groups of the operational MV 100 encoders to MPEG-4 in a process that was recently completed.

"The completion of our migration to MPEG-4 for the delivery of our broadcast channels is an important milestone for Video Networks. The ongoing improvements in advanced encoding will enable us to free up bandwidth which can then be used in our continuous quest to provide ever more advanced products and services for our customers," said Roger Lynch, Chairman & CEO, Video Networks Limited.

He added: "We are particularly proud to be the first company in the world to complete the MPEG-4 migration in broadcast. The move places a stake firmly in the ground for VNL and reinforces our position as world leaders in IPTV."

"We see the benefit of advanced encoding in MPEG-4, combined with European service providers' migration to ADSL2+ enabling the sector to provide HDTV in the very near future," he concluded.

VNL's successful transition is a testament to Harmonic's best-in-class implementation of MPEG-4 AVC which is fully able to deliver the compression capabilities required for bandwidth-sensitive network operators to provision compelling, revenue-generating TV services. In addition, the expanded reach made immediately possible thanks to the efficiencies of MPEG-4 significantly enhances the service's cost structure, strengthening VNL's position in a dynamic entertainment services market. VNL's pace-setting IPTV service offering represents a model for how IPTV can radically change the consumer experience from a passive broadcast format to a highly personalized, interactive experience.

"Video Networks' move to MPEG-4 AVC, a historic event that will change the dynamics of the broadband TV industry, provides a strong technology platform for continued service innovation and business growth," said Patrick Harshman, President of the Convergent Systems Division of Harmonic Inc. "VNL's success highlights how Harmonic's singular focus on building value for its customers has produced groundbreaking products such as the DiviCom MV 100 multi-codec encoding platform. This approach minimizes the risk typically associated with emerging technologies while allowing operators to continuously grow their service portfolio and subscriber base. This is why, for example, approximately 4,000 advanced codec-ready DiviCom MV 100 systems are in service today, making it the world's most widely deployed encoding platform in its class."

As part of the complete Harmonic-based solution, VNL is also using Harmonic's NMX Digital Service Manager(TM) to monitor and control its complete digital television infrastructure as a series of services, simplifying the provisioning of these services while ensuring maximum uptime. NMX's management automation facilities have streamlined VNL's conversion to MPEG-4 AVC and eliminated the potential for errors during the migration that can cause sustained unplanned downtime.

About the DiviCom MV 100

The DiviCom MV 100 encoding platform delivers compression efficiencies and video quality that redefine the meaning of ultra-low bit-rate encoding for MPEG-2 and advanced video codecs such as MPEG-4 AVC (H.264) and SMPTE VC-1. The MV 100 builds on more than a decade of digital video compression leadership and the experience gained by delivering encoders that power more than 30,000 channels. With its innovative software architecture, massive processing capacity and multiple output options, the MV 100 is the engine behind emerging applications, such as MPEG-4 video-over-IP and cable digital simulcasting services, as well as core ultra-low bit-rate broadcast and stored content applications.

About Video Networks Limited

Video Networks is a leading provider of broadband entertainment and communications through its digital TV, video-on-demand (VOD), home phone and Internet services under the brand name HomeChoice. The company's service is currently available to 2.4 million homes across London and Stevenage.

The HomeChoice entertainment service is the best all round digital TV, video-on-demand and broadband Internet package on the market, with over 80 of the best broadcast and on-demand entertainment channels including BAFTA award-winning interactive music channels and more than 5000 on-demand movies, music videos and TV programmes. Sky Sports and Sky Movies channels are available on the HomeChoice platform under a retail distribution agreement with BSkyB.

About Harmonic Inc.

Harmonic Inc. is a leading provider of digital video, broadband optical networking and IP delivery systems to cable, satellite, telecom and broadcast network operators. Harmonic's open standards-based solutions for the headend through the last mile enable customers to develop new revenue sources and a competitive advantage by offering powerful interactive video, voice and data services such as video-on-demand, high definition digital television, telephony and Internet access.

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: ongoing improvements in advanced encoding which will enable VNL to free up bandwidth, enabling the sector to provide HDTV in the very near future, and the move to MPEG-4 AVC being a historic event that will change the dynamics of the broadband TV industry.

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 area 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.

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