News Release

For Immediate Release

BEDMINSTER, New Jersey, March 10, 1999 — After having shown very strong performance in the previous quarters, growth in the business telephone industry slowed in the fourth quarter of 1998. Manufacturers of PBX and Key/Hybrid systems shipped 7% fewer Stations/Lines than in the third quarter of 1998. This is as reported by The Eastern Management Group's 4Q98 Monitor^sm Report, which tracks the sales and market share of CPE (Customer Premises Equipment) manufacturers.

Fourth Quarter 1998 PBX Total Line (Station) shipments increased 4.9% over the same period last year (4Q97) resulting in more than 2.1 million lines shipped. Total PBX System shipments were up 11.8% over fourth quarter 1997 and down 11.5% compared to third quarter 1998.

Nortel captured the number one position for both Systems and Total Lines in the fourth quarter with market shares of 25.8% and 31.8% respectively. Lucent was a close number two with 23.1% of the systems market and 31% of the Total Lines market. Mitel and NEC continued to pose a strong challenge to Nortel and Lucent, capturing 19.8% and 13.4% of the Systems market respectively. NEC was number three in Total Lines with a 9.6% market share.

Key/Hybrid Total Line (Station) shipments increased 8.8% over the fourth quarter 1997, but dropped 15% compared to the previous reporting period resulting in 1.9 million lines shipped. The shipment of Systems decreased by 5% compared to the same period last year and decreased by 11.5% against third quarter 1998.

Lucent remained the market leader in System shipments for the reporting period capturing 24.4% of the market, but lost the number one spot for Total Line (Station) shipments to Nortel. Nortel increased its market share of Systems to 21.1% in 4Q98 and gained the number one spot for Total Lines with a market share of 19.7% compared to Lucent’s 19.3% market share. Nitsuko captured the third spot with an 8.5% Systems market share. Inter-Tel showed strong growth and increased its market share of the Total Line market to 9.1%.

About The Eastern Management Group
The Eastern Management Group is the oldest and largest management consulting and market research firm engaged by clients exclusively in the telecommunications industry. For more information about the Monitor program or The Eastern Management Group, please call (908) 306-8800 or visit us on the World Wide Web at www.EasternManagement.com.

Contact:
Rikke H. Kasse
The Eastern Management Group, Inc.
(908) 306-8800 Phone
(908) 306-9595 Fax
Rkasse@EasternManagement.com