Innovative Products, Next-Generation Services, Commitment to Quality

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1 Review of 1999 Operations 4 Innovative Products, Next-Generation Services, Commitment to Quality Westell Technologies is ready to face the growing opportunities in the telecommunications industry. The Company s products and services create value by helping to maintain and to enhance traditional voice and nextgeneration integrated networks. Innovative Products Westell s product areas, traditionally segmented as TAP (DS0 and DS1) and DSL, are now categorized as HiCAP, Transport Systems and CPE. Each group revolves around the access network (the portion of the communications infrastructure that links customers into and out of the core switches and routers) and the local loop, or CPI s new Dublin, Ireland office has the operational, sales and service capabilities to complement CPI s domestic business. the so-called last mile between the telephone company central office and the end user. Both Transport Systems and HiCAP products incorporate portions of Westell s Telco Access and DSL products. Westell has developed strong relationships with providers that use the local loop access infrastructure and leverages its sales force to sell the Company s entire portfolio of offerings to the same customer. Next-Generation Services The Company s services business consists of its audio, video and IP data conferencing subsidiary, CPI. Through its world-class conferencing services, CPI links people together from around the world. CPI is expanding its capacity, geographical reach and technology. Its new Lombard, Illinois facility enhances existing operations in Schaumburg, Illinois, providing even greater reliability for uninterrupted conferencing. The Company s new Global Services subsidiary has an operations and sales center in Dublin, Ireland, serving European carriers and global corporations with locations in Europe and Asia. CPI s Internet capabilities enable data and graphics transmissions to accompany audio and video conferences in real time. As users take advantage of the Internet and its potential to combine voice, data and video, CPI s conferencing capabilities can open up an exciting array of applications. Commitment to Quality To realize Westell s vision to maintain and to enhance existing and next-generation networks, a never-ending commitment to quality is essential. Westell s products are globally recognized for their reliability. This year, the Company again received quality honors from leading carriers such as GTE and SBC for its HiCAP products. CPI is the first teleconferencing service bureau to receive ISO 9002 certification for voice and data. These results reflect Westell s Quality Mission of total customer satisfaction and continuous improvement. Building on Westell s leadership in performance monitoring, the new PROACT NIUs eliminate downtime for T1 circuits and locate problems more easily.

2 5 Installing thousands of T1 circuits each month, Ameritech is using PROACT Performance Monitoring NIUs to ensure greater circuit availability for its business customers. HiCAP Products PRODUCT OVERVIEW Westell s HiCAP business remains the Ameritech, Bell Atlantic, GTE and Sprint are among the service providers choosing our new PROACT family of T1 NIUs to monitor their local loops around the clock. T1 and HDSL electronics) have increased year after features eliminate downtime and help customers locate leader in network interface units (NIUs) and mountings. HiCAP, short for High Capacity, refers to local loop special circuits that have higher capacity than normal telephone circuits. Since Westell s inception in 1980, the Company has manufactured products that work with these special transmission circuits to lower costs and increase reliability for service providers. year due to the rising number of T1 circuits installed in communications networks. Major Sales for PROACT NIUs Westell remains the leader with a 60% market share in performance monitoring T1 NIUs. These devices help carriers monitor and maintain circuits on which they have high-speed, T1 circuits deployed. Westell pioneered T1 performance monitoring in 1991 and has continued problems more easily. In fiscal 1999, PROACT customers included Ameritech, Bell Atlantic, GTE and Sprint and Westell also received approval by US WEST. MegaJack and DS3 In fiscal 1999, Westell announced its newest line of products to support high-speed DS3 delivery at 45 Mbps. The MegaJack product line includes DS3 Repeaters and Highest Volume Shipped to innovate and to lower product cost. The Company s DS3 NIUs. These new products will help customers to In fiscal 1999, for the third straight year, Westell shipped an unprecedented unit volume of HiCAP products. T1 NIUs and T1 mountings (specialized enclosures for latest offering is the PROACT family of T1 NIUs with full-time monitoring of the local loop. The products real-time performance monitoring and auto-aligning locate problems on their DS3 circuits faster and to help eliminate downtime.

3 6 Millions of people connected to remote terminals can potentially receive DSL thanks to the integration of Westell s ADSL solution in the Lucent Technologies SLC Series Access Systems. Transport Systems PRODUCT OVERVIEW Westell s technical expertise and powerful partnerships enable communications for millions. Westell s Transport Systems business serves both TAP and DSL markets. A single development and marketing team increases efficiency and reduces time-to-market. This approach also capitalizes on the complementary technical relationship between DSL and Westell s other New Customers for SmartLink Westell s SmartLink Automatic Protection Switch System is attracting reliability-minded independent local exchange carriers (ILECs) and wireless service providers that need to protect the revenue associated with their digital facilities. Westell has also begun a trial in the Asia-Pacific region, with the first SmartLink product using the E1 (non-north American) standard. Lucent Technologies SLC LinkReach Access Systems In 1999, Westell is developing a fully integrated plug-in ADSL solution for Lucent s SLC Series 5 Carrier System and SLC Access System. With this integrated digital loop carrier solution, the millions of people connected by Lucent s SLC Access Systems can potentially receive DSL services. transport platforms. The Company s experience has shown that customers are in search of solutions that not only deliver DSL, but also provide a full spectrum of services and features. By combining the technical and marketing synergies of various TAP and DSL systems, the Transport Systems group is positioned to deliver integrated system-level solutions to its customers. Total Access System Westell s multiservice Time Division Multiplexed access platform became available to its customers this year. By offering multiple transport services such as T1, HDSL and optical DS1, Total Access can lower service costs for ILECs, competitive local exchange carriers (CLECs) and other customers. SuperVision DSLAM with Fujitsu Telecommunications Europe, Ltd. (FTEL) Westell is partnering with FTEL to deliver its SuperVision DSL Access Multiplexer (DSLAM) to British Telecom (BT) for high-speed ADSL services.

4 7 The most extensive deployment of Westell s DSL equipment began in the fall of 1998 through Bell Atlantic, the largest RBOC. Entire households can rapidly access the Web for different projects via ordinary telephone lines, thanks to Bell Atlantic s Infospeed DSL Service with Westell s ADSL equipment. As the demand for broadband communications increases, Westell serves the end-user with state-of-the-art DSL modems. Fiscal 1999 was an important year for Westell s Customer Premise Equipment group, which includes ADSL modems that link the desktop to high-bandwidth communications. Customer Premise Equipment PRODUCT OVERVIEW Successful Deployment: Bell Atlantic s Infospeed DSL Service Alcatel Compatibility When a telecommunications provider makes an investment in a supplier s equipment, it is important to develop products that will work with and enhance that equipment. Westell is developing modems that ensure this kind of interoperability for DSL subscribers. In fiscal 1999, Westell developed a family of products designed to work with the technology deployed in Alcatel DSLAMs. for service providers maximizing the use of installed copper and facilitating migration to next-generation IP networks. It will also deliver a powerful package of services to small and medium-sized businesses. Since the Communications Portal will be interoperable with other proprietary DSLAMs and gateways, it offers tremendous flexibility to service providers. Westell is working closely with customers to have Bell Atlantic customers began enjoying high-speed Internet access via Westell s WireSpeed modems. These products enable high-speed Internet access for subscribers within the nation s largest Regional Bell Operating Company (RBOC). Communications Portal Westell is developing the Communications Portal Integrated Access Device (IAD) that will combine voice and fax data services over a single DSL line. The Communications Portal will change the economic model market trials of the Communications Portal by the end of this year. The BIRD foundation, a joint US-Israeli government foundation, recognized the value and potential of the Portal and awarded development funding to Westell and its partner, the Israeli-based firm Audio Codes, Ltd.

5 Conference Plus, Inc. 8 SERVICES OVERVIEW CPI leads the way in innovation and customer satisfaction in the growing conferencing market. European Operation CPI also expanded internationally, opening a new facility in Dublin, Ireland. This office serves European owns its own communication network, it can provide a private label or reseller service. This allows multiple local and long-distance network carriers to brand and CPI, Westell s global service subsidiary, enjoyed another year of record growth, increasing revenues 51% after a 37% gain in fiscal Part of this growth telecommunication carriers, as well as global corporations with locations in Europe, Asia and the Pacific Rim. The office offers operational, sales and services capabilities resell CPI s services and to carry the conferencing traffic on their own networks. This reseller service is complemented by CPI s direct business with major corporations CPI s new Lombard, Illinois facility keeps multipoint teleconferences running smoothly by providing greater reliability for customers. featured expansion into new facilities. With the opening of its new Lombard, Illinois facility, CPI mirrored its technical operations in Schaumburg, Illinois. These facilities are connected with a SONET ring network, thus offering added reliability to customers. as a complement to CPI s domestic business. The Reasons Behind CPI s Success Today CPI is amongst the largest independent service bureaus in the fully managed teleconference business. Because CPI is not part of a larger carrier that such as American Express, which recently awarded the Company a prestigious Supplier of Excellence Award (see page 10). The conferencing business continues to grow as call-in teleconferences dramatically reduce travel costs

6 9 and time for geographically dispersed organizations. CPI distinguishes itself from other teleconferencing businesses through its quality, customer service standards and operational efficiencies. Surveys show a 98.9% level of customer satisfaction with CPI s services. And in fiscal 1997, CPI received the first ISO 9002 certification for Data Conferencing and IP Technology CPI s growth has been matched by its innovation. The Company continually updates and evolves its technology, thereby avoiding the costly forklift upgrades common to the teleconferencing industry. In fiscal 1999, CPI aggressively pursued another major initiative: and computerized engineering drawings. CPI is well positioned to capitalize on Internet growth and continue its record performance. Rick Riviere, CPI CEO and Ernst and Young Media Entrepreneur of the Year in Illinois, explains the advantages of call in teleconferencing. the audio and video conferencing service industry. CPI also provides value-added services such as fax confirmations, online advanced registrations and customized reporting and billing systems. The new state-of-the-art facility in Lombard, Illinois represents Westell s continuing investment in CPI. migration of the teleconference to Internet Protocol services. CPI s new IP data conferencing enables interactive, real-time sharing of electronic information along with a video or audio conference. Participants can increase meeting productivity with spreadsheets CPI has taken a major step towards migration of teleconferencing to Internet Protocol services with its IP data conferencing.

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