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NMS Adds Profitable New Revenue Stream; Expands into "Whole Product" Offerings forNetwork Equipment Suppliers, Wireless Service Providers

NMS Communications (NASDAQ: NMSS), a leading supplier of technology for tomorrow's networks, has announced that it has completed the acquisition of the voice enhancement and echo cancellation business of Lucent Technologies (NYSE: LU).

Under an agreement with Lucent, announced on October 15, NMS paid million in cash for all assets of this business. NMS is also entering into a multi-year agreement to serve as the exclusive supplier of stand-alone voice enhancement and echo cancellation systems for Lucent, as Lucent continues to supply these systems to its global service provider customers. At the same time, the agreement allows NMS to expand its market reach by establishing new alliances with other communications equipment suppliers and service providers.

The acquisition is part of NMS' strategic focus on becoming a premier provider of complete systems for communications infrastructure, applications and services within the rapidly growing wireless, voice applications and packet infrastructure markets.

By completing the acquisition, NMS has gained a new family of complete, ready-to-install systems, an experienced carrier-facing sales force, deep technology capabilities in the areas of voice quality, wireless networks and fault-tolerant systems, as well as the rights to noteworthy intellectual property and patents. The existing customer base of the business, which totals more than 100, includes many of the world's leading service providers.

"Voice enhancement and echo cancellation systems serve to improve voice quality, an important factor in increasing average revenue per user (ARPU), and making it easier for service providers to retain and attract customers - all exceptionally important during this downturn in the communications industry," said NMS Chairman and CEO Bob Schechter. "These system offerings extend and complement our long-standing business as a trusted partner and supplier to the communications industry with an advanced range of carrier-class systems for wireless and wireline networks. In addition to solidifying the company's strategic relationship with Lucent, this acquisition brings a knowledgeable voice enhancement team and an added, profitable revenue flow."

The voice enhancement and echo cancellation business spans a line of systems that telecom carriers deploy in central offices and mobile switching centers to achieve consistently clear audio quality. Without an assist from such equipment, echoes, delays and other conditions degrade the quality of voice calls. All wireless or landline voice traffic passes through some type of echo cancellation or voice enhancement product for this reason.
Among wireless service providers, voice quality technology is a critical differentiator. It is vital to minimise customer churn, and to encourage customers to place more and longer calls.

A 2001 forecast from the Yankee Group, a global leader in technology research and strategic consulting, projects that mobile infrastructure spending will exceed 0 billion in 2004. Yankee Group also anticipates the number of wireless subscribers will reach 1.3 billion worldwide by 2006, which would more than double the number of wireless subscribers in place at the end of 2000. According to Yankee, wireless users will also surpass the number of wireline access lines by 2006.

Voice enhancement systems also boost audio quality in two areas that have long been strengths for NMS: voice over IP (VoIP) systems and enhanced services that use automatic speech recognition, such as voice-activated dialing.

Marketed by Lucent as small footprint, high availability products, the highly regarded echo cancellation and voice quality systems benefit from the unique Studio Sound. set of enhancements - including features that address noise reduction, noise compensation, automatic and adaptive level control, dynamic speech restoration, wireless tandem-free operation and data compatibility -delivering exceptional sound clarity in noisy or overly compressed communications settings. The product line also includes the EchoScan system, which allows for comprehensive remote management system and integration with carriers' back-end operations support systems (OSS).

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About NMS Communications

NMS Communications (NASDAQ: NMSS) strives to lead in the design, development and distribution of hardware and software for the communications industry's most advanced solutions. Using NMS products and services, the world's leading networking and telecommunications suppliers get their solutions to market faster, and at lower costs.

NMS supplies the essential technologies for network-based IP media services, voice Web applications, speech-driven enterprise solutions such as customer relationship management (CRM), and packet voice and broadband access services, including voice over IP (VoIP), voice over DSL (VoDSL) and voice over wireless local loop (VoWLL).



Press Contact:

Kim Polley/ Gillie Tennant
Brodeur Worldwide
01753 448836
kpolley@uk.brodeur.com
gtennant@uk.brodeur.com


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