Press Release

Data Connection and MetaSwitch Announce Record Profits

Data Connection and MetaSwitch buck industry trend, highlighting core company and product strengths

Alameda, CA: October 28, 2002. In the midst of bankruptcies and revenue restatements throughout the telecommunications industry, vendor MetaSwitch, and parent company Data Connection (DCL), today announced the closure of their most profitable year ever. For the financial year to August 31, 2002, earnings were $11M on revenues of $35M, representing the company's 21st straight year of strong profitability supplying telecoms technology to OEM and carrier customers.

How, in an industry currently experiencing the most challenging market conditions in living memory, was this possible? Ian Ferguson, the company's founder and chairman, attributes its success story to "our ability to leverage our engineering excellence and management expertise to deliver best-in-breed advanced telecoms solutions." Ferguson added: "In the current market conditions, our customers are looking more closely than ever at their vendors' financial stability and ability to deliver: MetaSwitch and Data Connection have an unrivaled track record on both counts."

All three of the company's divisions saw increases in their business performance.

• MetaSwitch, supplier of the VP3500 Next Generation Class 5 Switch, enjoyed increasing market traction among service providers in North America and Europe. Highlights for this division include announcements of deployments in New Jersey, Washington and Massachusetts, and installations in each of the Competitive, Rural/Independent, Cable MSO and ILEC carrier communities. These customers are turning to the VP3500 for its ease of deployment, and best-in-breed support for a wide range of Class 5 subscriber services over IP, ATM and legacy TDM networks.
• The Internet Applications Group (IAG) enjoyed strong interest for its flagship conferencing solution, DC-MeetingServer, as a direct result of the reduction in travel following the events of September 11. Just as important to the group, its carrier-class Unified Communications technology continues to gain deployments by major service providers. Highlights for the year include recognition by SBC with their prestigious Supplier Award, and the deployment by multiple service providers of an integrated Web and audio conferencing solution based on DC-MeetingServer.
• DCL's Network Protocols Group (NPG) reinforced its position as the leading independent supplier of portable protocol software, with new or repeat business from customers including Lucent, Nortel, Siemens, Cisco, IBM, Foundry Networks, CIENA and NEC. The key product introduction was a suite of IP routing protocols, including OSPF, ISIS and BGP, in addition to upgrade releases for the group's established products: ATM, MPLS, SIP, MGCP and Megaco/H.248.

Looking ahead, Data Connection's CEO Phil McConnell sees a bright future: "We are witnessing a steady evolution to next generation network (NGN) technologies, and the days of legacy TDM switching and traditional subscriber services are numbered. While current market conditions are undeniably tough, MetaSwitch and Data Connection have the financial security, the engineering strength, the products and the sales and support capability to weather the current storm and emerge as a major player in the NGN space."

About MetaSwitch

MetaSwitch, a division of Data Connection, is the result of 21 years of experience supplying leading-edge technology to the telecommunications industry. The company's track record of consistent profitability ensures long-term commitment to development and customer support. The MetaSwitch VP3500 Next Generation Class 5 Switch offers service providers an immediate solution for broadband (VoIP and/or VoATM) and POTS service and a future-proof "softswitch" architecture for enhanced applications. Visit the MetaSwitch website at www.metaswitch.com.

About Data Connection

Data Connection Limited (DCL) is a leading provider of core communications technology, including networking protocols such as MPLS, SIP, MGCP, Megaco/H.248, SCTP, ATM, and IP routing, as well as conferencing, unified messaging and directory services. Visit the DCL website at www.dataconnection.com.

MetaSwitch and Data Connection have offices in London, Chester and Edinburgh in the UK, and Alameda, CA, Dallas, TX and Reston, VA in the US.

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Data Connection and MetaSwitch are trademarks of Data Connection Limited and Data Connection Corporation. Brands and products referenced herein are the trademarks or registered trademarks of their respective holders.