Press Release: May 19, 2000

WR Hambrecht + Co Issues eNetwork Infrastructure Industry Report

$87 billion industry poised for growth as Internet economy expands

San Francisco, CA, May 19, 2000—WR Hambrecht + Co today announced it issued a comprehensive report on the rapidly expanding eNetwork Infrastructure market. eNetwork Infrastructure: Enabling the Networked Economy is available on WR Hambrecht + Co’s web site at www.wrhambrecht.com.

The report concentrates on emerging trends in communication networks that form the basis of the Internet economy -- namely the convergence of voice and data networks and optical networking. The report also offers updated views of established and rapidly growing markets for broadband access technologies and carrier datacom infrastructure.

WR Hambrecht + Co’s eNetwork Infrastructure analyst Tim Savageaux estimates carrier spending to reach $87.7 billion in 2000, an increase of 18 percent over 1999. He adds that these numbers may increase throughout the year as carriers respond to both competition and subscriber demand.

"High-speed, intelligent and reliable communications systems are essential in achieving a fully networked economy for technology firms of all types. And preliminary indications show that 2000 will be another strong year for carrier investment in network infrastructure," Savageaux said.

The report defines four major trends representing the primary growth drivers in the sector:

• Voice/Data Convergence — The report states that voice services is changing from a circuit-based to a packet-based infrastructure. This transition opens up a $20 billion annual market opportunity in current voice switches to emerging Voice over X (VoX) hardware and software vendors.
• Optical Networking — The report suggests penetration of optical technologies throughout the carrier network should drive growth as photonic technologies migrate into the switching arena and as next generation SONET-based solutions continue to thrive.
• Broadband Access — Savageaux believes that demand for bandwidth by both business and residences will continue to fuel investment by carriers in xDSL, cable, fiber optic and wireless access technologies. The report projects that broadband will grow from 2.6 million subscribers in 1999 to 27.5 million in 2003.
• Carrier Datacom Infrastructure — The report states that as U.S. Internet and data communication traffic increases, building the emerging carrier data communications infrastructure should account for significant capital expenditures.

Savageaux projects growth in each of these areas presents significant investment potential in both established suppliers in the market, and emerging vendors.

The eNetwork Infrastructure space is comprised of companies that design, develop, and manufacture the networking systems that form the basis of the emerging Internet economy. eNetwork Infrastructure suppliers specifically enable communications service providers to satisfy increasing demands for communications bandwidth to support an increasingly networked economy.

The report offers profiles of 60 private companies as well as an overview of publicly traded eNetwork Infrastructure suppliers.