Reorganization of VTEL Corporation.

VTEL Corporation, a global leader in the development and supply of videoconferencing products and services for corporate networks, in the fourth quarter In 2000, it made a general reorganization. In early December, two new independent divisions of the corporation were formed: Product Business Unit and Solutions Business Unit.

This restructuring reflects the overdue trends towards the separation of ”traditional” videoconferencing from systems and software for Web broadcasts, management and monitoring in IP networks. The separation of these areas is a natural step in the new economy, where the Internet and Intranet are playing an increasingly prominent role. By focusing their efforts on the relevant markets, each of the newly organized VTEL divisions will be able to ensure the delivery of the highest quality services to customers and partners and achieve greater success in promoting products.

Product Business Unit VTEL will be engaged in the development, production and supply of VCS systems (including series products SmartStation, Health Series, ESA and Galaxy). In the Galaxy series, in the next few months, it is planned to design models based on a new architecture, which will certainly increase the competitiveness of VTEL in the VCS market. Cooperation will also continue in the framework of OEM agreements and equipment supply of multimedia video servers and gateways from such well-known manufacturers as Ezenia!, RADVision and Accord.

Solutions Business Unit VTEL will deal mainly with equipment and software for video-Web technologies, which are currently experiencing an unprecedented rise in many countries of the world. Organizationally, this division will also include the Global Service Unit department, which provides pre-sale and after-sale support to partners and end users, including technical and warranty support, as well as support for large projects.

The reorganization of the corporation provides for the closure of regional offices of VTEL and the transfer of support for the distribution network from January 2001 to a single center in Austin, USA to reduce the delivery time of equipment and more operational interaction of the manufacturer with distributors.

Race Communications, as the exclusive distributor of VTEL in Russia, will continue further cooperation with the corporation. Race specialists believe that working directly with the manufacturer will contribute to business development and expansion of the videoconferencing market in Of Russia.

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