New Broadband Consortium Formed to Develop Next Phase of DSL Technology

Industry Group Led by ECI Telecom Focuses on Dynamic Spectrum Management to Provide Increased Connection Speeds to Subscribers

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PETAH TIKVA, Israel--(BUSINESS WIRE)--ECI Telecom (NASDAQ: ECIL) today announced the formation of a new consortium designed to spearhead the development and implementation of Dynamic Spectrum Management (DSM).

“DSM is the next step in the evolution of telco's access infrastructure. It will allow telcos to provide high-bandwidth services cost-effectively by leveraging FTTC topologies rather than replacing all copper wires with fiber-optics until the subscriber premises (FTTH)”

DSM is a promising technology expected to provide reliable, fiber-optic-like rates over the existing copper infrastructure. DSM is expected to have a significant impact on the market, as the DSL industry is looking for solutions beyond VDSL2 to increase subscriber broadband rates.

ECI Telecom is leading this consortium; the other members who take part in this multidisciplinary approach are leading telecom operators including Telefonica I y D and Bezeq, innovative vendors including Actelis, RIT Technologies and Amethist, as well as leading academic institutions, including the Technion, Bar Ilan University and Tel Aviv University.

The group is funded with an expected grant of 8 million Euros (US$10 million) over the next three years, and is being financed by the Chief Scientist Office of the Israeli Government.

“The main obstacle for the advancement of DSL technology is the interference ("crosstalk") generated from different DSL lines that share the same telephone cable binder,“ said Professor John Cioffi, Professor of Engineering at Stanford University, a pioneer of DSM research, who is also recognized as the inventor of the DMT line code. “DSM is a promising technology for the future evolution of broadband access networks using existing copper infrastructure."

“DSM is the next step in the evolution of telco's access infrastructure. It will allow telcos to provide high-bandwidth services cost-effectively by leveraging FTTC topologies rather than replacing all copper wires with fiber-optics until the subscriber premises (FTTH),” said Zvika Weinshtock, VP Marketing of ECI Telecom’s Broadband Access Division. “We are proud to be leading the vision and development of this consortium for DSL technology and working together with other industry and academia members to better our technological expertise and competitiveness in the global DSL market.”

ECI Telecom will be presenting a discussion on DSM and the Consortium at the Broadband World Forum in Paris on October 12, 2006.

About ECI Telecom

ECI provides advanced telecommunications solutions to leading carriers and service providers worldwide. By translating a deep understanding of their needs into innovative, technologically advanced solutions, ECI enables its customers to increase the value of the infrastructure of their networks and reduce operating expenses. ECI's platforms provide carriers and service providers with carrier-grade solutions for easily introducing new revenue-generating services.

ECI provides innovative IP service delivery solutions to the converged telecom networks encompassing broadband access gateways, service edge routers, optical transport, NGN VoIP and multimedia applications and services. ECI maintains a global sales, marketing and customer support network, as well as a host of strategic channel relationships worldwide.

Certain statements contained in this release may contain forward-looking information with respect to plans, projections or future performance of the Company. By their nature, forward-looking statements involve certain risks and uncertainties including, but not limited to, product and market acceptance risks, the impact of competitive pricing, product development, commercialization and technological difficulties and other risks detailed in the Company’s filings with the Securities and Exchange Commission.