Russian Cable Operator Selects Harmonic for St. Petersburg's First La

Russian Cable Operator Selects Harmonic for St. Petersburg's First Large-Scale Digital Cable Service

    Business Editors/High-Tech Editors
    CSTB 2005, Stand #601

    MOSCOW--(BUSINESS WIRE)--Feb. 7, 2005--

DiviCom(R) Encoders and NMX Digital Service Manager(TM) Give National Cable Networks More Channels with Better Video Quality and Greater Control
    Harmonic Inc. (Nasdaq:HLIT) today announced that its industry leading digital video compression and service management solutions have been deployed by National Cable Networks (NCN), a prominent Russian cable operator with systems serving St. Petersburg, the country's second largest city. The compression capabilities of Harmonic's DiviCom(R) MPEG-2 digital video encoders combined with the power and ease-of-use of NMX Digital Service Manager(TM) make it possible for NCN to more than double its service carrying capacity and improve video quality while reducing operational complexity and costs.
    One of Russia's largest cable companies, NCN has more than one million subscribers in and around St. Petersburg, an area encompassing approximately 4.7 million people. As with cable operators around the world, NCN faces growing competition from other video service providers, making it necessary to expand its offerings in order to protect and grow its customer base. The advanced compression capabilities of Harmonic's DiviCom encoders enable NCN to efficiently transport a competitive lineup of digital broadcast television channels from the main headend to 50 distributed headends using an existing MMDS wireless backbone network. In each of the local headends, the digital and analog television services are combined for delivery via MMDS, coaxial and fiber networks to the subscriber.
    "Customers are demanding more from their entertainment experiences and television is no exception," said Sergey Kalugin, President and CEO of National Cable Networks. "Harmonic provided a cost-effective way to deliver a competitive digital TV service within our available bandwidth while making it possible to add more channels as well as on-demand and interactive digital services in the future. Harmonic's understanding of advanced digital video services and broadband access networks along with their global success in implementing digital simulcast services were key factors in the selection process."
    "NCN has surpassed the one million subscriber mark in St. Petersburg by offering a solid lineup and great value," said Dr. Yaron Simler, President of Harmonic's Convergent Systems Division. "Launching the first digital cable television service in St. Petersburg with an expanded range of services will help NCN reach a new segment of the market and increase its revenue. This deployment reflects Harmonic's continued commitment to the Russian broadband television market and underscores our leadership in providing digital headend solutions to network operators and broadcasters in Europe and the rest of the world."
    NCN's Harmonic-based digital headend is fully scalable, allowing the introduction of next-generation services such as high definition television and video-on-demand. Harmonic's NMX Digital Service Manager reduces complexity and operating costs by enabling NCN to centrally monitor and control its digital headend -- including Harmonic and third party systems -- as a series of services rather than just discrete hardware and software elements. The NMX point-click-provision user interface simplifies the task of adding new digital services and managing the underlying systems.

    About DiviCom Encoders

    Every day Harmonic's encoders deliver thousands of channels of television to tens of millions of households worldwide. From their first deployment a decade ago, the DiviCom(R) encoders have consistently set the benchmark for high quality, low bit-rate, digital television services. This industry-leading family of SD and HD systems, which is complemented by the best-in-class DiviCom Ion(TM) multichannel encoder, addresses a wide range of price/compression performance and functional requirements for broadcast and on-demand applications. Harmonic is also at the forefront of introducing systems based on advanced compression technologies -- such as MPEG-4 AVC (H.264) and SMPTE VC-1 -- to further increase the service carrying capacity of a network as well as to enable new services.

    About National Cable Networks (NCN)

    National Cable Networks (NCN) operates cable networks in major cities throughout Russia. The company was founded in 2000 with the goal of consolidating fragmented cable assets into a unified national broadband network. NCN's strategy is to build its customer base through the acquisition of regional cable service providers and then upgrade the infrastructure to two-way HFC (hybrid fiber coaxial cable) capable of supporting advanced digital services. Currently, NCN has a total of approximately 1.6 million subscribers in Moscow, St. Petersburg, Ekaterinburg, Novosibirsk, Kurgan, Electrostal and other cities.

    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: the possibility for NCN to more than double its service carrying capacity and improve video quality while reducing operational complexity and costs; the necessity for NCN to expand its offerings in order to protect and grow its customer base; the possibility to add more channels as well as on-demand and interactive digital services in the future; and NCN's ability to reach a new segment of the market and increase its revenue.
    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 are 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.

    EDITOR'S NOTE -- Product and company names used herein are trademarks or registered trademarks of their respective owners.

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CONTACT: AxiCom (Media Relations for Harmonic) Stephen Orr, 408-543-2360 or +44-20-8392-4056 stephen.orr@axicom.com or StreetConnect (Investor Relations for Harmonic) Michael Newman, 408-542-2760 mnewman@stct.com

KEYWORD: CALIFORNIA RUSSIA INTERNATIONAL EUROPE INDUSTRY KEYWORD: HARDWARE TELEVISION/RADIO CABLE TELECOMMUNICATIONS NETWORKING TRADESHOW PRODUCT SOURCE: Harmonic Inc.

Copyright Business Wire 2005