Cellular Backhaul a $20 Billion Market for Cable, Says Xtend Networks White Paper

Cellular Backhaul a $20 Billion Market for Cable, Says Xtend Networks White Paper

ATLANTA, Sept. 14 /PRNewswire-FirstCall/ -- The sale of T1 circuits to mobile carriers for the transport of mobile voice traffic between cellular towers and switching offices represents a $20 billion opportunity for cable over the next five years, according to a white paper released today by Xtend Networks(TM), a Vyyo company (NASDAQ:VYYO) that provides advanced broadband solutions for the cable TV industry.

The paper, which details both the business case and the technology necessary for providing voicegrade T1 service over hybrid fiber-coax networks, discusses how cable can capitalize on the growth of the cellular industry to create a new, highly predictable revenue stream by providing an alternative to incumbent T1 providers. The paper is available at the Xtend Networks website, www.xtendnetworks.com.

"On average, 24% of cellular carrier revenue is eaten up by transport costs. And of that expense, some 60-75% is backhaul," the paper reports, citing information from GeoResults, a telecom database marketing and consulting firm. "With the rise of 3G, which requires closer cell site spacing, as well as the increased support for data and multimedia applications, cell backhaul expenditures are projected to soar."

"Intense competition in the mobile market means carriers are facing increased price and margin pressure. And with cell site traffic growing rapidly, it is essential that mobile carriers find solutions to reduce T1 transport costs," said Michael Harris, president and principal analyst of Kinetic Strategies, Inc. "Cable is uniquely positioned to create a win-win that lowers backhaul costs for the mobile industry, and provides cable operators with revenues from an entirely new market. In addition, deploying T1 infrastructure can also open the doors for cable to make further inroads into the commercial services marketplace."

By deploying DOCSIS(TM) based architectures that meet or exceed American National Standards Institute (ANSI) standards for jitter, latency and Error Free Seconds, the paper says, operators can provide high-quality, highly-reliable T1 links that generate $300-$400 monthly revenue each, and an approximate payback period of 13 months.

Xtend's carrier class T1/E1 technology combines the company's XMTSTM family of products, headend modular systems servicing up to 48 T1 links, and the company's V3xx family of T1 modems to provide a low jitter, low latency solution that utilizes existing infrastructure and Xtend's T1 Network Management System. To enable cable to capitalize on the growing cellular backhaul market, Xtend provides a complete value chain for the transport of mobile communications traffic from cellular towers to central switching locations. The cellular backhaul value chain capitalizes on relationships with GeoResults for market data, MasTec and GTS for equipment installation, and Paradigm Telecommunications for contracts with cellular carriers.

About Xtend Networks(TM) (A Vyyo(R) company)

Xtend Networks(TM) ( www.xtendnetworks.com ) provides cost-efficient, innovative solutions that have been designed to expand up to two times the usable downstream bandwidth and increase up to tenfold the upstream bandwidth of typical hybrid fiber-coaxial (HFC) network architectures. Xtend's RF technology works with existing infrastructure to significantly increase upstream and downstream capacity, enabling cable system operators to economically deploy DOCSIS(R)-based symmetrical commercial services, HDTV and other bandwidth intensive services. Xtend Networks is part of Vyyo Inc.'s portfolio of broadband end-to-end solutions used by cable and wireless operators worldwide. For more information about Vyyo Inc., please visit www.vyyo.com.

Safe Harbor Statement

Statements made in this press release relating to the future, including those related to the opportunities created for our customers given our ability to provide T1 services and to dramatically increase upstream and downstream bandwidth, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Risks that may cause these forward-looking statements to be inaccurate include among others: whether we will be able to move from development stage to deployment and establish commercial relationships with cable system operators; whether the cable industry will be willing and able to substantially increase the available bandwidth on their networks and do so using our alternative technology solution; the current limited visibility available in the telecommunications and broadband access equipment markets; the competitive pricing environment and slower than expected development of broadband wireless opportunities; the willingness and ability of operators to adopt our new technology and apply it in a manner that meets customer demands; Vyyo's ability to produce and distribute its broadband wireless products in the quantities, and with the quality control, desired by the market; and other risks set forth in Vyyo's annual report on Form 10-K for the year ended December 31, 2004, Vyyo's quarterly reports on Form 10-Q and other reports filed by Vyyo with the Securities and Exchange Commission from time to time. Vyyo assumes no duty to update these statements.

NOTE: All trademarks mentioned herein are the property of their respective owners. CableLabs and DOCSIS are trademarks of Cable Television Laboratories, Inc. An equipment demonstration at a CableLabs' event does not constitute CableLabs' endorsement of that equipment.

Source: Xtend Networks

CONTACT: Investors, Walt Ungerer, Vice President of Corporate Communications of Vyyo Inc., +1-650-319-4029, or ir@vyyo.com; or PR, Paul Schneider of Paul Schneider Public Relations, Inc., +1-215-702-9784, or pspr@att.net, for Xtend Networks

Web site: http://www.xtendnetworks.com/

Web site: http://www.vyyo.com/

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