Duluth, Ga. -January 27, 2000 -Mitsubishi Electric Corporation (Mitsubishi) launched a new North American based company to provide network operators with advanced optical access technology for their business and residential customers. The new company named PACEON Corporation (PACEON) is an independent company headquartered in Duluth, Georgia. Currently at 50 employees, PACEON plans to double in size during the next year.

"Mitsubishi recognizes the need to do some things fundamentally different to be totally successful in today's fast paced and competitive market. PACEON is charged with redefining the way Mitsubishi will do business with relentless focus on the customer and time to market," according to Mr. Michio Nakanishi, Group President Communication Systems, Mitsubishi Electric Corporation (Tokyo). PACEON's goal is to be the unsurpassed supplier of cost effective Full Service Access Network systems enabling the convergence of legacy and emerging broadband network services onto high quality Asynchronous Transfer Mode (ATM) Passive Optical Networks (PON). The new company will develop products locally to deliver world-class telecommunications solutions to fulfill the voice, data and video needs of customers. Mr. Motoyuki Nakamura, the newly instated President and CEO of PACEON states, "As an independent company, PACEON will have the autonomy and agility to operate as a North American equipment vender and at the same time leverage the superior technologies and resources of Mitsubishi in Japan."

Mitsubishi demonstrated its leadership in Japan's telecommunications market with sales revenues rising 19% in its last fiscal year. In this same period, Mitsubishi's competition experienced significant drops in revenue. This growth in revenue and market share was a result of superior telecommunications technologies and program execution.

Mitsubishi entered the North American telecommunications infrastructure marketplace in 1997 with the creation of Mitsubishi Telecommunications Network Division (MTND) operating under Mitsubishi Wireless Communications Inc. Within 18 months, MTND was successful in introducing ATM PON access solutions for North American operators, complete with the latest and most advanced network management capabilities. Based on this success, Mitsubishi is now spinning off MTND into PACEON as an independent company to provide the focus and commitment to deliver superior products and services to the North American marketplace. Mr. TC Nie, Executive VP of PACEON emphasizes, "We are very excited to be taking our place in this fast paced industry. Our new product line is essentially taking network convergence from the network and delivering it to the customer."

Market Background

In North America, the explosive growth of Internet demand and expanding volume of data traffic has led to a marked increase in demand for higher subscriber access speed. In response, telecommunications firms in North America have begun to replace existing equipment with high-speed subscriber access lines. As a result, the subscriber access system market is expected to increase more than two-fold, from US$2.8 billion in 1998 to US$6.3 billion in 2003.

Although there are various systems for increasing the speed of subscriber access system lines, those expected to achieve the highest growth are multimedia services capable of large volume and high speed image transmission and ATM optical access systems which are based on optical telecommunications and provide superior telecommunications quality. To meet these trends, Mitsubishi is channeling efforts into technical development in these fields and through alliances in Japan and North America. The ATM optical access system market in North America is expected to start with FTTB (Fiber to the Business) for business applications in 2000 and then expand to include FTTH (Fiber to the Home) by 2002.

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About Mitsubishi Electric Corporation, Japan

With more than 75 years of experience in providing reliable, high quality products to both corporate clients and general consumers all over the world, Mitsubishi Electric Corporation is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and construction. With operations in 34 countries, Mitsubishi Electric Corporation recorded consolidated group sales of over US$31 billion in the year ended March 31, 1999. Additional information on Mitsubishi Electric Corporation is available at Global.MitsubishiElectric.com.

About PACEON Corporation

Headquartered in Duluth, Ga., PACEON is an independent company owned by Mitsubishi Electric Corporation, Japan. PACEON develops and delivers access products to North American telecommunications network operators and specializes in Fiber to the Home (FTTH) and Fiber to the Business (FTTB) using ATM Passive Optical Network (APON) technologies. For more information about PACEON, visit www.paceon.com or call (770) 717-6800.