Ditech Networks Enables Managed Services Providers to Reduce Network Costs Up to 20%

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Ditech Networks (Nasdaq:DITC), a leading provider of voice quality solutions to the world’s communications industry, today announced that its voice quality products can improve the business model used by equipment vendors in the Managed Services market. Ditech’s voice quality products allow these vendors to leverage speech compression to increase call capacity on the network without decreasing voice quality. This strategy can decrease the capital and operating expense of managed services agreements up to 20 percent, enabling equipment vendors in this market to be more competitive.

Many network operators now develop and market a brand based on a set of mobile services. These operators outsource the deployment and operation of the network based on service level agreements with equipment vendors, which act as Managed Services Providers (MSPs). MSPs often operate the network based on an aggressive fixed cost per user. Reducing capital and operating expenses—while still complying with service level agreements—is essential.

Using low bit-rate codecs is a well-known strategy to serve a rapidly growing number of subscribers, but it can cause degradation in voice quality, which leads to customer dissatisfaction. Ditech’s products enable the increased use of low bit-rate codecs while maintaining consistent, clear voice quality, providing a reliable and low-cost strategy to manage network capacity. This strategy helps preserve the margin necessary for equipment vendors to serve the Managed Services market, while delivering to operators a network that is fully capable of supporting the rapid and profitable growth of mobile services.

“Ditech can relieve much of the pressure on cost and margin now being felt by Managed Services Providers,” said Karl Brown, Vice President of Marketing at Ditech Networks. “Ditech’s solutions can play an important role in the build-out of mobile networks, and in bringing costs in line with what the Managed Services market demands. This is especially true in international markets where the average revenue per user tends to be low.”

Ditech’s mobile solutions support 2G, 2.5G and 3G networks. The company’s products are available with both of Ditech’s industry-leading voice quality applications, Voice Quality Assurance (VQA) and Experience Intelligence (EXi). VQA non-intrusively and automatically detects and eliminates problems that degrade voice quality. The application mitigates network-induced impairments, impairments from the caller’s environment, and impairments from callers’ devices, in real-time, on both ends of the call.

EXi non-intrusively measures speech quality in real-time, on every call. Information from EXi about signal, noise, echo and frame/packet loss can be input into the ITU G.107 E Model to compute MOS or R-Factor scores much more accurately than solutions that rely on packet loss and delay statistics alone. In addition, EXi statistics can be used directly in pre-configured reports, or integrated with existing network test and measurement systems.

About Ditech Networks

Ditech Networks is shaping the future of voice quality through continuous innovation and leadership for the world’s communications companies. Ditech’s voice quality solutions are deployed in wireless and wireline networks to optimize the call experience. By delivering consistent, dependable voice quality, Ditech’s products help global communications companies meet the multiple challenges of service differentiation, network expansion and call capacity. Ditech’s customers include Verizon, Sprint/Nextel, Orascom Telecom, AT&T, China Unicom, Global Crossing and West Corporation. Ditech Networks is headquartered in Mountain View, California. For more information, visit www.ditechnetworks.com.

Forward Looking Statement

This press release contains forward-looking statements regarding Ditech Networks’ expectations of the benefits from using Ditech Networks’ products and applications in the Managed Services market. Actual results could differ materially as a result of unanticipated factors and events, including the risk that Ditech Networks’ solution may exhibit unforeseen technical problems that will preclude those benefits from being utilized, the fact that certain networks may not have the capacity issues that Ditech Networks’ solutions address to enable the cost reductions, as well as those detailed in the "Future Growth and Operating Results Subject to Risk" in Part I, Item 2 of Ditech Networks' Quarterly Report on Form 10-Q for the quarter ended July 31, 2008 (filed Sept. 9, 2008, with the Securities and Exchange Commission).