PLEASANTON, Calif. and TURKU, Finland -- Tut Systems Inc. (Nasdaq: TUTS - News) the leading provider of digital broadcast video systems for xDSL environments, and Teleste (HEX: TEL1V), the leading European supplier of network solutions for cable operators, announced today a joint marketing and sales agreement to offer standards-based video solutions for Fiber to the Premises/Home (FTTP/FTTH), Fiber to the Curb (FTTC), and hybrid fiber/coax (HFC) environments.

The joint system architecture, first deployed at Atlantic Telephone, a North Carolina telephone cooperative of over 35,000 members, is based on the global DVB-C open transmission standard for digital TV. The solution integrates the Tut Systems Astria® Content Processor and the Teleste Presto, Brillante and Legato products into a system that optimizes the use of RF-based analog, RF-based digital, and IP-based digital TV channels over fiber and cable networks. This combination is a natural extension of Tut Systems' leading solutions for IP TV over xDSL and Teleste's analog and digital product lines aimed at HFC environments. It provides customers a smooth path from current analog-only cable plants to a digital TV tier without having to undergo massive system upgrades.

Under terms of the agreement, Tut Systems will focus its marketing and sales efforts for this solution within North America and Teleste will focus its efforts on opportunities in Europe and the Middle East. The companies will take a joint approach to markets in Asia. Teleste will also be promoting Tut Systems' M2-400 family of edge video devices for high quality, MPEG-2 4:2:2 applications.

"Tut Systems' Astria content processor has proven itself in the industry as the best choice for delivering IP TV in both telco and hybrid telco/cable environments," said Jukka Rinnevaara, CEO, Teleste. "This fact, combined with Tut's track record for total systems integration and their large installed customer base make them the natural choice for this open systems approach."

"We believe that both telcos and cable companies want to have a choice of open, standards-based systems when designing their new digital networks for advanced applications such as video-on-demand (VOD) and high-definition (HD) TV," responded Sal D'Auria, CEO and President of Tut Systems. "Our unique approach, enabled by the globally accepted DVB standard and industry leading products from Teleste, is a strong alternative to existing proprietary end-to-end offerings."

The companies are actively working with and openly inviting additional manufacturers of DVB digital set-top boxes, conditional access systems, and FTTH/HFC access systems to participate in this drive to leverage the open DVB-C standard.

Tut Systems Inc.

Teleste Corp.