Telco Systems Signs Agreement with Major Japanese Distributor

Business Wire, May 31, 2007

FOXBORO, Mass. -- Telco Systems announced today that it has signed a distribution agreement with CTC, one of the largest distributors to the Japanese technology market and the network distribution arm of the ITOCHU CORPORATION.

Having passed all of ITOCHU Techno-Solutions Corporation (CTC) rigorous technical testing processes, CTC will now distribute Telco Systems' products and solutions through its sales channels, which achieved revenues of 294bn Yen (circa PS1bn) for the year ended 31 March 2007. CTC is currently the number one vendor to the Japanese market of Sun Microsystems, EMC, Avaya, Hewlett Packard, Network Appliances, Symantec and various BEA Systems' Weblogic applications, as well as the number two vendor of Cisco Systems.

"We see Telco Systems' products as an incomparable technology in the Japanese operators market. Access network business opportunities are on the rise in Japan, and we are pleased to offer a solution like Telco Systems products to our customer's needs of Access network," stated Junichi Maruta, General Manager of CTC.

Telco Systems has developed a number of solutions to allow carriers to deploy Ethernet-based services to both business and residential customers. These solutions allow carriers to extend quality of service throughout their network, maintain their ring based access infrastructure and integrate IP as well as TDM services in the access and aggregation layers of the network.

"Telco Systems is delighted to add CTC to its distribution chain. The Japanese market is the most demanding and quality oriented market in the world and we are delighted by the choice of CTC. We are looking forward to a fruitful cooperation," stated Zvi Marom, president and CEO of Telco Systems.

About CTC

Established in 1972, ITOCHU Techno-Solutions Corporation (CTC) provides advanced IT solutions to enhance enterprise network systems. CTC supports such market segments as telecommunications, broadcasting, finance, distribution, manufacturing, education/government, medicine, pharmaceutical/chemicals, and textiles/apparel. CTC has formed partnerships with more than 200 leading IT companies from nine countries. These partnerships range from those with global multinational IT companies to those with highly focused venture businesses. CTC employs over 6,000 people nationwide, and provides one-stop 7X24/365 support services in roughly 100 service centers. For more information, visit the CTC web site at www.ctc-g.co.jp/en/.> About Telco Systems

Based in Foxboro, Massachusetts, Telco Systems is a leading provider of carrier-class transport and access solutions for IP and TDM networks for carrier, service provider and enterprise markets. Its suite of products includes solutions for Carrier Ethernet Access rings and demarcation, residential and enterprise VoIP, FTTx, SONET, TDM and T1 backhaul.

Founded in 1972, Telco Systems' focus is to maximize the power of their customers' networks by integrating transport, access and packet technologies onto industry-leading platforms that meet today and tomorrow's network demands.

Telco Systems is a wholly owned subsidiary of BATM Advanced Communications (London stock exchange ticker symbol: BVC). For more information, please visit Telco Systems' web site at http://www.telco.com.