Harmonic Inc. announced that, according to results published in Multimedia Research Group, Inc.'s (MRG) new "IPTV Market Leader Report," it is the undisputed leading provider of digital video encoders to top tier telcos worldwide. The high-performance DiviCom encoders power more than 2,300 standard and high definition channels for this category of operators, nearly twice the combined total of the two vendors commonly considered Harmonic's main competitors. MRG also concluded that Harmonic has very strong growth prospects around the world as a result of its deployments in major IPTV networks.

Harmonic is focused on delivering the highest performing and most extensible digital video solutions to top tier telco and IPTV service providers, a segment that encompasses large-scale regional, national and multinational operators. DiviCom encoders are currently used to deliver approximately 1,050 IPTV channels in Europe -- more than double the number installed by the nearest competitor in this segment -- and more than 300 channels in Asia. In addition, operators across North, Central and South America have deployed a total of almost 1,000 of the high-performance Harmonic encoders. The U.S. IPTV market is dominated by small rural and independent telcos that often implement services using systems designed to meet their specific functional and cost requirements.

Today, Harmonic counts many of the world's top tier IPTV operators as its customers. Some of the operators utilizing Harmonic solutions include Aliant (Canada), CanalSatellite (France), NTT Plala (Japan), SaskTel (Canada), SOFTBANK Yahoo! BB (Japan) and Video Networks (UK). These trendsetters have pioneered the IPTV market over the past five years in both MPEG-2 and MPEG-4 AVC (H.264) with the world's first large-scale IPTV service, the first service based solely on MPEG-4, the world's largest IPTV service and the first multi-service digital headend to support video-over-DSL.

"Harmonic has established a strong market position as a provider of video headend solutions in major IPTV markets, such as Western Europe, Asia and Canada," said Bob Larribeau, Senior Analyst for MRG, Inc. "We believe Harmonic is well positioned to access emerging opportunities as IPTV services are more widely deployed in 2006 and beyond."

Harmonic is the preferred partner to operators for several key reasons. DiviCom encoders can efficiently deliver compelling digital TV services over highly bandwidth-sensitive DSL networks, while offering the ability to further improve performance and the flexibility to enable new capabilities once deployed. In addition, Harmonic brings a long track record of technical innovation including the world's first multi-codec encoder as well as the first multi-service encoder. A comprehensive vision and product roadmap ensures operators will be able to establish and maintain a market-leading service.

"As confirmed by MRG's recent market study, Harmonic has consistently been selected to provide digital video headend solutions to leading telco and IPTV operators around the world, accounting for nearly 50 percent of the channels in Europe and 20 percent in Asia," said Patrick Harshman, Executive Vice President of Harmonic Inc. "Pioneering work and unparalleled expertise in IP video transport and advanced compression technology, including ground-breaking accomplishments such as the first IPTV service based exclusively on MPEG-4 AVC, combined with a blue chip installed base and market momentum, position us well to maintain our leadership in this market."

Harmonic's video compression systems being deployed by IPTV operators include the DiviCom Electra 5000 Multi-Service Encoder and the MV 100 Multi-Codec Encoder. Offering the ultimate compression flexibility for existing and emerging applications, the DiviCom Electra 5000 can encode a single channel in multiple formats, multiple channels in a single format or multiple channels in different formats. Basic configurations simultaneously encode two full resolution channels using either MPEG-4 AVC or MPEG-2 while others provision a mix of full and low resolutions in MPEG-2 and MPEG-4.

The DiviCom MV 100 is the world's most deployed MPEG-4 AVC-enabled encoder, delivering compression efficiencies and video quality that redefine the meaning of ultra-low bit-rate encoding for MPEG-2 as well as MPEG-4 and SMPTE VC-1. Since its introduction in late 2003, the MV 100 has been deployed by telco, cable, satellite and terrestrial broadcasters for innovative applications -- such as the world's first MPEG-4 AVC-based TV-over-DSL service and cable digital simulcasting -- to become the leading multi-codec capable, real-time video encoder. Today, MV 100 encoders in use around the globe deliver thousands of free and pay TV services to tens of millions of viewers.