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Date: 2nd February 2006
Title: Transmode announces doubling of sales in 2005

Transmode, the Optical Networking Pioneer, announced today that the company had achieved over 100% growth in confirmed order intake in 2005, and reported further milestones including the successful merger with Lumentis, numerous awards and new customer wins.

"As with previous years, we had set ourselves the aggressive target of doubling sales in 2005 and I am pleased to announce that like those previous targets, we have achieved this milestone and continued our rapid growth throughout the year," said Rune Hurtig, Transmode's Chairman and Acting CEO. "We enter 2006 with a very strong order book and sales momentum and have therefore set ourselves the target of doubling sales again in 2006, giving us 4 straight years of triple-digit growth. 2005 was also a significant year in that it saw the successful merger with Lumentis which has broadened our product portfolio and added key strengths and customers to the organisation."

During 2005 Transmode announced a number of significant sales wins, including Telenor, 3 Denmark, BaneTele, Gamma Telecom, Citylink Broadband, Transport for London and PacketExchange, in addition to a number of as yet unannounced customers in Europe and North America. These unannounced customers cover a broad range of markets from major European Cable TV operators to small enterprises.

In the 9 months since the merger with Lumentis, Transmode has become a major supplier of WDM equipment to network operators and enterprises for the metro, regional and access optical transport markets. Within a few weeks of the merger, the new organisation structure was implemented in a single location within Stockholm. The broader portfolio has enabled significant cross-selling of new products to existing customers and the stronger company has won customers that previously would not have been addressable. In addition, Transmode achieved ISO 9001 and 14001 certification during 2005.

"2006 will be an exciting year for Transmode, where we will capitalise on the momentum gained in 2005 in what is broadly recognised as a re-energised market for Optical Transport Systems," said Michael Crossey, Transmode's VP of Marketing and Business Development. "We now have a significant number of customers with large frame contracts who are placing multiple purchase orders on Transmode each month. In total we now have well in excess of 100 customers ranging from PTTs and Cable TV operators to smaller enterprises."

2005 saw more award wins for Transmode including Red Herring, Technology Pioneer from the World Economic Forum and 5th place in Deloitte's Swedish Fast 50 amongst others. In fact Transmode was the only company in the Deloitte Swedish Fast 50 to have previously been recognised as a Deloitte Rising Star, in 2004.

Significant product milestones were also achieved by Transmode in 2005, most significantly the combination of the two previous product lines into a cohesive portfolio addressing all-optical transport applications from large regional and national networks to small campus networks. Other advances included new XFP-based 10 Gbit/s transponder units, longer system reach for both amplified and unamplified systems and the Double Dual Gigabit Ethernet card providing industry leading Gigabit Ethernet transport functionality for WDM systems. Transmode also undertook the worldÕs first native 4G Fibre Channel demonstrations in conjunction with Brocade and SUN and will start shipping this functionality to customers in Q1 2006. Finally, Transmode's TM-206 compact aggregation unit became commercially available in 2H 2005 and is now shipping in volume to customers.

About Transmode
Transmode is a Pioneer in Optical Networking. Innovations such as 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