China's Casil Telecommunications Holdings Limited Signs Initial $20-Million Purchase Commitment for Adaptive Broadband's AB-Access

Business Wire, March 15, 2000

Business Editors/High-Tech Writers

SUNNYVALE, Calif.--(BUSINESS WIRE)--March 15, 2000

Contract Potential Value Exceeds $500-Million Over

Next 42 Months For Fixed Broadband Wireless Equipment

ADAPTIVE BROADBAND CORPORATION (Nasdaq:ADAP) announced today it has signed a contract with Casil Telecommunications Holdings Limited (CASTEL) (Hong Kong Stock Exchange: Stock Code 1185), valued in its first year at $20-million (U.S.), that will make this company a manufacturing and market access partner for Adaptive Broadband's(TM) AB-Access(TM) fixed broadband wireless equipment in China.

If all phases of the agreement are achieved, the contract has a potential value of more than $500 million during its 42-month term. Adaptive Broadband indicated that, notwithstanding the agreement's 42-month term, this represents the beginning of a long-term partnering agreement for AB-Access deployment in Asia. CASTEL is owned both publicly and privately. It is the telecommunications subsidiary of China Aerospace Industry Corporation.

CASTEL announced that carriers will initially deploy AB-Access in China's Guangdong province. It has already received commitments for field trials, to begin later this month, with Guangdong Telecom, and several other provincial subsidiaries of China Telecom. Guangdong Telecom is the largest telecommunications operator in China.

This represents the first use of AB-Access outside of the United States, and the first deployment of any kind of fixed broadband wireless technology in China.

Transfer of Manufacturing Technology

CASTEL's equipment manufacturing subsidiary, China Southern Telecom (CST), will assemble, manufacture, and test the product. Adaptive Broadband will transfer the product's manufacturing technology to CASTEL, with the exception of its chip set, which will be supplied as a manufactured component. Adaptive Broadband will retain all other intellectual property rights for AB-Access. CASTEL will market the equipment to carriers in China under a private labeling agreement with Adaptive Broadband.

Deployment in 5.8 GHz Band

AB-Access is a point-to-multipoint broadband wireless technology that spans frequency ranges from 2 to 42 GHz, providing data rates at speeds up to 25 Mbps, which is more than 400 times faster than possible with a 56 kbps modem and dial-up connection.

Deployment in China is planned to occur in the 5.8 GHz frequency, pending certification by the country's Ministry of Information Industry (MII). This frequency is designated in the United States as the U-NII (Unlicensed National Information Infrastructure) band. Adaptive Broadband has received contract signings in the U.S. exceeding $600-million since introducing AB-Access in 1999, making it a market leading fixed broadband wireless product for the 5 GHz band.

Estimated 20 Million Internet Users

"AB-Access gives us a proven solution for high-speed Internet access, while providing unmatched advantages in speed-to-market and low-cost deployment that are inherent with wireless technology," said Wang Xiaodong, vice chairman and managing director of CASTEL. "Guangdong province is the most affluent and technologically advanced in China. And it is leading the pace of Internet access in China. That access is increasing at a tremendous rate, growing from an estimated 800,000 Internet users throughout the country in 1997 to an estimated 20 million users today. That number is doubling every six months."

"This is a significant milestone, confirming that AB-Access is truly a world-class, market-leading solution for ultra-high-speed Internet access," said Frederick D. Lawrence, Adaptive Broadband's chairman and chief executive officer. "And it delivers on a promise to our shareholders that we be first-to-market in what we project will become a $100-billion worldwide market for fixed wireless broadband communication."

"Through this strategic alliance with CASTEL, Adaptive Broadband seeks to contribute to China's unprecedented broadband infrastructure development," Lawrence continued.

Other Versions Extend Global Reach

Since introducing AB-Access less than 12 months ago, Adaptive Broadband has developed additional versions for deployment in other frequencies, helping to extend the technology's global reach. A version for the MMDS (Multichannel Multipoint Distribution Service) band between 2.5 and 2.7 GHz was successfully tested in late 1999, and a third version, for the 3.5 GHz frequency in Europe, will be introduced later this year.

About CASTEL

CASTEL is the telecommunications subsidiary of China Aerospace Industry Corp., formerly the Ministry of Aerospace Industry. It is the major shareholder, with a 40.9% holding, of China Southern Telecom (CST), a joint venture established in 1992 with MPT/China Telecom, Guangdong PTA, Jiangsu PTA and Hubei PTA. CST is an ISO9001 certified manufacturer.

About Adaptive Broadband

Adaptive Broadband (www.adaptivebroadband.com) is a data networking solutions company that is developing leading-edge technology for the deployment of broadband wireless communication over the Internet. Its AB-Access product is a leading commercial choice for fixed broadband wireless communication.