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Date: 2nd June 2005
Title: Transmode Makes the Move into North America - New company created from merger with Lumentis brings successful Optical Networking portfolio to North American Market

Transmode, a global pioneer of optical networking solutions, today announced its launch into North America by establishing Transmode Incorporated and appointing one of its most senior members of staff to lead the business in the region. Anders Lundberg, formerly the CEO of Lumentis with whom Transmode merged in March, will take up the position of CEO of Transmode Inc. and will relocate to Plano, Texas, where Transmode had already established a sales office.

Transmode has been extremely successful in Europe, where it has secured more than 100 customers including a recently-announced contract with the Tier 1 Norwegian PTT and Global Service Provider, Telenor, and received recognition from the investment community including an award from Red Herring magazine. Now, Transmode believes the time is right to build on this success and fully enter the North American market.

"Developing our business in North America is the next major strategic step for Transmode following our merger with Lumentis", said Isaac Olasoko, Transmode's CEO. "The region represents 39% of our global addressable market of $1.7 billion and is growing at 20% CAGR. We see strong signs of a sustained recovery in the WDM market, driven by triple-play infrastructure build, demand for business Ethernet services, and the growth of Storage Area Networks. Now is the time to capitalize on this trend, and Anders Lundberg is the ideal person to execute our strategy having successfully led Lumentis since its foundation in 2000. In addition, we intend to leverage the support of our US-based investor, HarbourVest, which can help us build stronger relationships with North American customers and partners."

"I am very excited about Transmode's prospects in North America", said Anders Lundberg. "Our sales team has already built a healthy pipeline of opportunities and my first priority is to secure our 2005 revenue objectives. In parallel, I will be executing our three-pronged channel strategy: driving direct sales with regional operators including our existing U.S. customers, expanding our network of Value-Added Resellers, and developing our relationship with OEM partners. I will also be forging partnerships with companies in the data and storage networking sectors to further strengthen our position in vertical markets".

Through the merger with Lumentis, the new Transmode brings a broad portfolio of Optical Networking products based on WDM technology that is particularly well suited to the needs of the North American market. Transmode's WDM solution allows network operators to build metro rings in densely populated urban areas that require a high number of wavelengths delivered to a large number of network nodes. The company has pioneered a unique, patented DWDM system architecture that supports up to 20 nodes and 40 wavelengths per ring without the need for amplification. This can lower first deployment cost by up to 60% compared with traditional Metro DWDM systems, and allows between 3 and 5 times as many nodes per ring as competing systems. At the same time, operational costs can be lowered by 25% to 30% because of the reduced complexity of unamplified systems and the ease of capacity upgrades.

Transmode will also announce a new product at next week's Supercomm event in Chicago which allows the deployment of small-footprint, fully-integrated low-cost Metro WDM nodes enabling highly economical backhaul of Gigabit Ethernet traffic generated by DSL and Cable-based broadband access systems. Further details of this product will be issued in a separate press release.

About Transmode:
Transmode is a Pioneer in Optical Networking. Innovations such intelligent WDM (iWDM), which dramatically lowers operational cost, and unamplified DWDM, which reduces network CAPEX and complexity, have contributed to success at a global level, with a customer base of more than 100 network operators, service providers, enterprises and public institutions across Europe, the Americas and Asia.

Transmode is the only company with the full spectrum of Optical Networking solutions based on WDM, designed to cater for the needs of Network Operators and Enterprises alike without compromising on functionality or cost-efficiency. Transmode's product portfolio addresses Optical Networking requirements from regional networks, through metro core and access networks, all the way down to the customer premises.

For more information about Transmode, please visit http://www.transmode.com

For further information please contact:
Michael Crossey
VP Marketing & Business Development
Transmode Systems AB
michael.crossey@transmode.se
Tel: +44 7734 318210

Press Contact:
Catriona Harris
415-984-1970 x118

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