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Press Release
                        Contact: Akiko Shikimori
                        PR.Division
                        NEC Corporation
                        TEL    :+81-(0)3-3798-6511
                        FAX    :(0)3-3457-7249
                        e-mail :*@p10-22150.star.nec.co.jp

***For your immediate use March  23, 1998

Hongkong Telecom Officially Launches
The World's First Interactive Multimedia Service

-NEC's Multimedia Technologies Contribute to the System-
On March 1, 1998 Hongkong Telecom launched commercial services of its interactive multimedia service named "iTV Service". This full implementation of the service follows preliminary trials which have been in operation in Hong Kong since July 1997. To celebrate the birth of this world-leading service, a launch ceremony was held today at the Hong Kong Convention and Exhibition Center. NEC plays an important role as equipment supplier and technology partner for Hongkong Telecom's US$1.5 billion project.

Hongkong Telecom IMS Ltd., a wholly owned subsidiary of Hongkong Telecom, is the first such project in the world to launch the services full-scale. The services included are Video On Demand (VOD), Music on Demand (MOD), Home Shopping, and Racing on Demand (ROD). Home Banking and Broadband Internet will be also available in the near future.

More than 20,000 subscribers are currently enjoying connection to the services and the number of subscribers is expanding. Within a few years approximately 250,000 to 300,000 subscribers are expected to be using the iTV Service.

NEC was chosen to supply Hongkong Telecom with Broadband Access Systems, Video Servers, and the Set Top Boxes (STB *This is called "Digital Smart Box" in Hongkong) necessary for connection to the services. The system is full ATM (Asynchronous Transport Multiplexing) based and operates from the servers to the STB via an ATM switched network including Broadband Access Systems.

NEC's Broadband Access Systems for Hongkong Telecom's project is the world largest deployment of the most advanced local access systems employing new technologies such as ATM, ADSL, VDSL, ATM25 in network configurations of Fiber To The Curb (FTTC) and Fiber To The Building (FTTB) architecture. Both FTTC and FTTB use fiber to an intermediate point and then metallic pair cable for the last drop cable for the home. Since there are many multi-dwelling buildings in Hongkong, fiber cables are extended from central offices to the residential buildings. NEBAX-300 Optical Network Units (ONU) are installed on a wall of the ground floor of a multi-dwelling building to terminate the optical signal and distribute electric converted signals to each home via the metallic pair cables.

Transmission technologies employed for the metallic pair cables include ATM 25 for mid-reach over 4-wire cable and VDSL for short reach over 2-wire cable. NEBAX-200 Host Digital Terminals (HDT) are located in a central office to communicate with NEBAX-300 ONU for traffic concentration. Co-locating NEBAX-200 HDT with NEBAX-300 ONU provides an ADSL system over metallic pair cables to each home. The application is carried in ATM cells which are transported over ADSL link. NEC's Broadband Access Systems are managed by NEBAX-100 Network Management Systems.

The digital STB (NEBAX-2000) interfaces directly with the FTTB system to receive ATM cells of multimedia data (video, home shopping or banking for example) transmitted from the video server. The MPEG2 compressed video streams are then decoded and displayed on TV screens in the home. STBs also connects PCs to support Broadband high-speed Internet access services. NEC's digital STB employs the most advanced technologies of DAVIC and ATM Forum. It also uses SVC protocol (UNI3.1 defined by ATM Forum) for connection to servers through a network.

Users are able to access Video on Demand and other multimedia services at any time by delivering video, still and voice data to each home. Users can enjoy any video provided through video servers using the conventional functions of a video cassette recorder such as playback, fast-forward, rewind and pause controls. This is all made possible by the use of NEC's Video servers (UP4800/HyperstreamSV), and software (HyperMS). Each server can handle up to 72 subscribers simultaneously and adopt the latest technologies such as DAVIC, CORBA, JAVA as well as MPEG2 for high quality video compression.

In response to the Hongkong Telecom IMS project, NEC is working closely with Hongkong Telecom as a project partner and has supplied most of the key products and systems to ready the service. NEC, through its sophisticated technologies, experience and business success in the world, will be actively involved in the international market to supply such multimedia systems. NEC believes that this successful implementation of the Hongkong Telecom IMS project is a positive step in NEC's worldwide multimedia business. With the growth of iTV Services, NEC anticipates the total sales volume to this Hongkong Telecom's project to be around US$500 million.

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[Copyright(C) NEC Corporation 1998. NEC and C&C are trademarks of NEC Corporation.]