Intellectual property rights used to take stake in free space optics company

LONDON, England and RICHMOND, British Columbia - June 26, 2001 - BTexact Technologies, BT's advanced research and technology business, announced today that it has exercised its option to acquire an equity stake in fSONA Communications Corporation, a manufacturer of free space optical wireless systems located in Richmond, British Columbia, Canada.

Free space optical wireless systems enable connectivity between buildings using beams of light to carry high-speed data, Internet or voice traffic. These systems can be used as an economical alternative to hard-wired methods.

fSONA's optical wireless products, the SONAbeam series, were created based on original development work on free space optics carried out by BTexact's forerunner, BT Laboratories, in the early 1990s. Five years of research and development has been invested in fSONA since its engineering team took over the original product design. The result is an industrial strength, carrier-class product range, designed for volume manufacturing and targeted at the expanding global market for high bandwidth connectivity.

Stewart Davies, CEO, BTexact Technologies said: "Free space optics has come of age. We have always maintained that there is a definite role for optical wireless in the telecommunications network infrastructure. It is a reliable, flexible component with compelling benefits offered by its very high capacity, low cost per bit and no licensing requirements worldwide. In addition, fSONA has maintained its commitment to the advantages inherent to the 1550nm wavelength which was a feature of our original research."

The 1550nm wavelength transmission used by fSONA ensures better performance over distance in adverse weather conditions, and equally as important, it adheres to fiber optic networking industry standards and guarantees complete eye safety. The 1550nm transmissions are blocked by the cornea and lens and not absorbed by the retina where damage can occur with shorter wavelengths.

"Taking a stake in fSONA using intellectual property rights demonstrates the value of the work that goes on at BTexact and shows our commitment to commercializing our work to the benefit of BT's shareholders," added Davies

"We are very pleased to have BTexact Technologies become an equity partner in fSONA," said Theresa Carbonneau, CEO and president of fSONA. "It has been involved from the very beginning, from raw technology to what is now a formidable, state-of-the-art bandwidth connectivity tool. BTexact's decision to exercise its equity option in fSONA speaks volumes not only about the potential of the free space optics industry in general, but of fSONA in particular."

About BTexact Technologies and Adastral Park

Created in April 2001, BTexact Technologies develops advanced communication technologies for the companies across the BT Group and external organisations. The business is headquartered at Adastral Park, Martlesham, at one end of the UK's Cambridge-2-Ipswich Hi-tech Corridor and is a founder member of the Cambridge Network. It is the centre of technical expertise for the BT Group and works with the company's businesses worldwide to help them to deliver new products and services to their customers and to build infrastructure for their future. BTexact Technologies has a remit to work in partnership with external organisations and is using its world-renowned expertise, experience and intellectual property to develop a significant commercial business.

While the majority of BTexact Technologies' people are based at Adastral Park, significant numbers are located in offices worldwide, including locations in Asia, continental Europe, and North America. They include many who are world leaders in their specialist fields, leading the development of standards and new technologies in areas including multimedia, IP and data networks, mobile communications, network design and management and business applications.

BTexact Technologies builds on the international reputation for research and engineering achievement established by BT Laboratories, the name used by BT's Adastral Park research and development facility prior to its transformation into a multi-company technology park. For more information about BTexact Technologies please go to www.btexact.com.

About fSONA
fSONA Systems is recognized as the preferred provider of optical wireless solutions for government, enterprise and service provider markets around the globe. Leveraging leading edge advancements in 1550nm optical transmission, the SONAbeam™ family of systems, based on free-space-optics (FSO), use a globally unlicensed, wireless technology to provide speeds up to 2.5 Gbps over distances up to 7km. For more information visit www.fsona.com or www.free-space-optics.org

Further Information
For more information about fSONA, SONAbeam or Free-Space Optical Wireless, please contact:

604-273-6333
media@fsona.com

fSONA and SONAbeam® are trademarks of fSONA Networks. All other trademarks are properties of their respective companies.