Pandatel to Restructure

HAMBURG, Germany -- Pandatel AG, a publicly traded company at the GermanPrime Standard market (ISIN DE0006916307), and a specialist for Ethernet andoptical networking products, announces that it has reached an agreement withthe Worker's Council regarding operations restructuring including a socialplan.

As part of the restructuring plan, Pandatel will consolidate its Germanoperations from 3 locations to 1 in order to decrease operating cost. Uponshareholder approval, Pandatel will move its headquarters from Hamburg toHanover where Pandatel has already its main team of engineers focused onEthernet products. The current headquarters in Hamburg will be shutdown andkey engineers will be offered to work in Hanover to be part of the R&D team.Pandatel's current Lightmaze division in Eisingen (Würzburg) will also beshutdown and key engineers transferred to Hanover as well to continue thedevelopment and support of its YUMIX optical networking products.

Upon the completion of the restructuring, total number of Pandatel employeesin Germany will decrease from current 100 people to about 30. The layoffaffects especially the production, as well as sales and administration. Thenew Pandatel R&D team will focus its efforts on developing next generationof Ethernet and optical products while some development activities as wellas manufacturing will be outsourced to Dowslake Microsystems. Pandatel andDowslake are currently working on a merger plan as they have announced onNovember 21, 2005.

Other details of restructuring plan include product consolidation and newmanagement team. Currently, Pandatel has more than thousands of product orvariants to be produced, with a large number of them selling at extremelylow volume. After restructuring, Pandatel will consolidate to 3 productcategories - Optical Networking, Ethernet & Multi-service Over SDH/SONET,and Last Mile/TDM Access. Products will be migrated to circuit platforms todecrease manufacturing burden and to improve cost as well as delivery. Totalnumber of product platforms will be decreased to less than 40.

Pandatel also announces its new management team. Andreas Hennig, who iscurrently head of R&D of Pandatel's Hanover team, will be appointed VicePresident of R&D to lead Pandatel's overall R&D effort. Mr. Hennig joinedPandatel in 2003 from Alcatel and has since led the team to develop a numberof innovative Ethernet and IP products. Mr. Hennig will be responsible fornew product development and performance/feature optimization of the existingproducts, based on customer feedback. Munther Jadallah, who is currentlyManaging Director Pandatel Asia Pacific, will be Vice President of Sales &Marketing. Mr. Jadallah has joined Pandatel in 1993 and is instrumental ininitiating and developing Pandatel's sales and customer base in the AsiaPacific region. Mr. Jadallah will be responsible for sales and for productmarketing, leading a team of regional sales as well as product managerslooking after Pandatel's re-organized product lines. Dr. Marc Ruelaender,currently Manager of Quality Management and Technical Service at Pandatel'sLightmaze division, will be appointed Director Quality Management andBusiness Processes. Dr. Ruelaender joined Pandatel's Lightmaze division in2002. He has played a major role at Lightmaze in building a practical andeffective business process governing Lightmaze's daily activities, resultingin successful development and manufacturing of YUMIX optical products withminimum headcount and resources. Dr. Ruelaender will be responsible toestablish or re-adjust Pandatel's current business processes in order tomaximize efficiency and to deliver consistent product quality.

"Since I took over the position on November 21, after spending weeksvisiting Pandatel's key customers and working with internal people, I cometo realize how lucky I was to be engaged with Pandatel," CEO Dr. Dan Yangcomments. "Particularly loyal customers, and a great team of engineeringtalent are the two most valuable things that I discover. With a long historyof technology excellence, product innovation, and a great deal of focus oncustomer satisfaction, I'm convinced Pandatel will succeed in the executionof our restructuring plan, and will emerge as one of the most customerdriven and competitive companies in the telecom and data communicationsindustry."

Pandatel AG (Frankfurt: PDE)