Salira and Teknovus Introduce Standards-Based EPON System; Standards-Compliant EPON Systems Designed to Enable Cost-Effective Fiber-to-the-Home Solutions

[April 21, 2004]

Salira and Teknovus Introduce Standards-Based EPON System; Standards-Compliant EPON Systems Designed to Enable Cost-Effective Fiber-to-the-Home Solutions

SANTA CLARA, Calif. --(Business Wire)-- April 21, 2004 -- Salira Optical Network Systems, the leading EPON provider in China, today announced the introduction of broadband solutions based on the Institute of Electrical and Electronics Engineers (IEEE) standard for EPON. Salira will partner with Teknovus to develop EPON systems that comply with the IEEE 802.3ah EPON standard. Salira's standards-based products are designed for deployment within the company's existing EPON solution, the Salira 2000 Platform. Salira's standards-based EPON systems dramatically reduce the cost of delivering broadband services such that cost-effective Fiber-to-the-Home (FTTH) solutions are now feasible.

"The introduction of standards-based chipsets will further reduce the cost of our systems and provide superior value for our carrier customers," said Ross Lau, Salira's CEO. "These new products overcome the economic challenges associated with delivering fiber-based solutions to the home."

Salira and Teknovus stated that the standards-based product line will be "backward compatible" with Salira's existing product lines. This innovation will enable standards-based Optical Line Cards (OLCs) and Optical Network Units (ONUs) to be installed in existing Salira 2500 head-end devices to offer a mixture of service types, and to protect investment in existing products. In future product releases, Salira will introduce a standards-only system. The new standards-based system, known as the Salira 3000 Platform, will further reduce the cost of delivering advanced broadband access to business and residential customers. As a key player in the development of the EPON standard, Teknovus is uniquely-positioned to deliver high-quality chipsets based on the standard.

"We are extremely gratified to be recognized by Salira as a valued technology supplier for their EPON product line," said Gerry Pesavento, president and CEO of Teknovus. "We look forward to a close partnership in which we develop standards-based products that are highly-differentiated in the marketplace. Our product road maps mesh well together, and we will begin to see the benefits of this common vision in upcoming product releases."

The EPON standard being developed by the IEEE 802.3ah task force is expected to be ratified by June 2004. The standard encompasses key technical elements needed to deploy broadband Ethernet services to business and residential users. The goal is to provide a wide range of benefits over traditional first mile technologies concerning cost, network simplicity, packet-based efficiency, bandwidth, scaling and provisioning. Salira expects to begin shipping standards-based products in volume by the fourth quarter of 2004.

The market for PON-enabled FTTH solutions is expected to expand quickly following official ratification of EPON standards. Probe Research estimates that global PON revenues will increase at a CAGR of 39.3% between 2003 and 2008. Infonetics Research reported in March 2004 that PON is growing rapidly in Asia Pacific, especially Japan, where hundreds of thousands of subscribers are using PON solutions. In April 2004, KDDI, Japan Telecom and others announced that they have agreed to establish "BB Japan," a consortium with the goal of expanding the broadband network services market. BB Japan's goal is to promote infrastructure, platform, content and services for FTTH through wide-ranging partnerships with other businesses related to broadband networking.

About Salira Optical Network Systems, Inc.

Headquartered in Santa Clara, California, Salira builds broadband systems that are used to deliver advanced voice, video and data services to business and residential customers. Salira's systems give carriers the ability to offer traditional TDM services and advanced IP-based broadband services in one integrated system that facilitates the migration to a more efficient and economic network architecture. Salira Shanghai, Ltd. is a wholly-owned subsidiary of Salira with responsibility for marketing and sales in the Asia Pacific region. Salira US website: www.salira.com. Salira Shanghai, Ltd. website: www.salira.com.cn.

About Teknovus

Teknovus is a leading provider of communication chipset solutions for digital broadband access networks. Teknovus designs, develops and supplies high value system-on-chip solutions for subscriber access networks, which improve transport capacity, provide management capability, integrate broad service functionality and lower the cost of broadband access. Teknovus website: www.teknovus.com.

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