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New Lucent Technologies Venture Will Create Digital Radio Broadcast Systems

Murry Hill, N.J. (May 11, 1998) - A new business venture announced today by Lucent Technologies (NYSE: LU) is developing digital audio broadcast systems that will provide listeners with greatly enhanced sound quality for AM radio and near-CD quality for FM radio.

The Lucent Digital Radio venture will develop In-Band On-Channel (IBOC) systems, a digital enhancement to current analog radio broadcasting systems. This technology places both high-capacity digital and analog signals within the existing spectrum, and will allow broadcasters to rapidly introduce digital sound to listeners on their current dial positions with existing transmitters and antennas.

Lucent Technologies and its research and development unit, Bell Laboratories, have been leaders in the digital encoding of information used in communications systems, and have been at the forefront of digital audio broadcasting (DAB) technology for the past decade.

Bell Labs has developed a number of patented technologies for the DAB market, including the Perceptual Audio Coding (PAC) algorithm. The PAC encoder converts AM or FM radio signals into high quality digital signals.

"Lucent Technologies is making a significant commitment to digital audio broadcasting through the formation of this Digital Radio venture," said Suren Pai, president of Lucent Digital Radio. "Lucent has the resources and the expertise to develop a successful IBOC DAB system for both AM and FM, and we will work with individual stations and radio network groups to achieve this goal on behalf of the radio broadcast industry."

"IBOC DAB is the most significant innovation in terrestrial radio broadcasting since the introduction of the FM band," he said.

There are more than 12,000 radio stations in the United States (AM and FM combined), and the number of radios owned in the U.S. is more than 500 million, or more than 5 per household. DAB systems are expected to be commercially available starting in 2000. This migration to digital radio presents a sizable opportunity for the consumer electronics industry and will enable radio broadcasters to provide improved services to listeners.

"The move to digital audio broadcasting is a watershed change for the U.S. radio industry, and Lucent plans to play a leading role in helping broadcasters make this important transition," said Thomas Uhlman, president of Lucent's New Ventures Group. "Lucent Digital Radio is another example of Lucent's intent to identify key Bell Labs technologies and to quickly create ventures to develop these opportunities and bring products to market."

The new venture will be based in New Jersey and will combine Lucent's vast expertise in the design of wireless systems with advanced Bell Labs audio technology.

Lucent has a long heritage in radio frequency systems. For example, Bell Labs helped pioneer commercial radio broadcasting with station WEAF in New York in the 1920s. Today, Lucent's Wireless Networks Group is a global leader in air interface standards for wireless communications and is the major provider of wireless infrastructure in North America.

"Bringing IBOC DAB to market requires a total systems approach, and Lucent has all of the core competencies needed here," said Richard Doherty, president of Envisioneering, a leading technology market research firm.

Lucent Digital Radio is the second Lucent venture in the digital broadcast market. Lucent Digital Video, announced in January, 1998, markets its industry-leading MPEG-2 encoders to the broadcast, cable, wireless cable, fiber optic and satellite markets.

"Bell Labs technologies are helping transition both the radio and television broadcast industries to the digital domain," said Arun Netravali, Vice President of Research at Bell Labs. "Lucent Digital Radio is the latest example of how venture companies can help speed Bell Labs technologies to market."

Lucent has launched six other businesses through its New Ventures Group since mid-1996. They include: Inferno, which markets Lucent's new distributed network-operating system software; elemedia, which provides software for high-quality speech and video over the Internet and intranets; Veridicom, which offers Bell Labs patented fingerprint-authentication technology in advanced software and hardware components for identification verification; Electroplating Chemicals and Services, which provides electroplating products and services to industrial companies worldwide; Visual Insights, which markets Bell Labs data visualization software and Lucent Public Safety Systems, which offers advanced systems for faster response to 911 emergency calls.

Lucent Technologies, headquartered in Murray Hill, N.J., designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronic components. Bell Labs is the research and development arm for the company. For more information on Lucent Technologies, visit the company's web site at www.lucent.com.

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