Terayon Secures Korean and Chinese Contracts
By Matt Paolucci

Terayon Communication Systems, Inc. (TERN), a leader in broadband networking systems, was selected by Shenzhen Topway Cable Net Company Limited (Shenzhen CATV), one of China's largest cable data net operators, for a major broadband deployment in China. The announcement represents another key milestone for Terayon in the Greater China region, following the selection of its broadband systems earlier this year by i-CABLE, Hong Kong's leading broadband service provider.

Shenzhen CATV, which currently serves more than 650,000 subscribers, chose Terayon's broadband cable modem system in order to offer high-speed Internet access.

"Shenzhen is a huge high-speed Internet access market," said Xie Jie Hua, director of Shenzhen CATV and managing director of Shenzhen Topway Cable Net Company Limited. In the People's Republic of China (PRC), Shenzhen has a special status as a technological innovation zone.

Zaki Rakib, CEO of Terayon, stated, "This launch in the most innovative, high-tech region in China, it is a keystone in Terayon's strategy to become the broadband leader in Asia.

"Shenzhen CATV is the latest in a growing number of Terayon's cable operator customers based in the PRC. Consumers in more than 20 cities, including Dongguan, Foshan and Zhuhai currently enjoy high-speed Internet access using Terayon's cable modem systems.

Today, TERN was also chosen by Cable and Multimedia Communication Limited (C&M), Korea's largest cable television operator, for deployment to its 560,000 current subscriber base in Seoul. C&M's broadband network already passes 2 million homes. C&M is now planning wide-scale deployment of Terayon's broadband data systems and is targeting to launch up to 100,000 cable modems and associated headends by the end of 2000.

In addition to its growing presence in the PRC and now Korea, Terayon's cable modem systems have also been deployed in several other Asian countries, most notably Japan, where Terayon's customers include Jupiter Communications, Japan's largest cable operator.

Terayon's cable modem system is an end-to-end system that provides high speed, two-way communication over cable television networks. TERN's system is based on the company's S-CDMA (Synchronous Code Division Multiple Access) technology. S-CDMA enables reliable two-way voice, data, and video communication across a broad range of cable network architectures and conditions.

Aside from its cable deals, Terayon, along with nCube, which provides video delivery systems, were recently chosen by MediaOne Group (UMG), the nation's third largest cable operator, to install targeted digital-into-digital ad insertion systems in MediaOne's 12 Los Angeles systems. The installations, the first of their kind in the U.S., will involve 480 channels, reaching over 900,000 subscribers. The initial systems are scheduled to launch April 1, during the Canadian Cable Show in Toronto.

Terayon seems to be firing on all cylinders. Seven of the eight analysts covering TERN rate the stock either a Strong Buy or Moderate Buy. Fiscal 2000 earnings estimates are for 18 cents, and 53 cents in 2001. Additionally, shares of TERN are trading for around $210, down 26 percent from its 52-week high of just over $285.