WATERCOVE NETWORKS RAISES $10 MILLION
TO ENABLE MASS DEPLOYMENT OF MOBILE WIRELESS DATA NETWORKS

Experienced Telecom, Mobile & Data Networking Team Launch New Venture

Burlington, MA, October 25, 2000 - WaterCove Networks, Inc., an innovative start-up company founded by senior mobile, telecommunications, and data networking executives, today announced it has raised $10 million from leading venture capital firms Charles River Ventures, Bessemer Ventures, and from inOvate Communications Group, a company that creates, invests in and manages wireless businesses.

WaterCove Networks is developing the next-generation data networking infrastructure solutions specifically for mobile networks. This new infrastructure will enable wireless service providers to easily and rapidly deploy advanced 'always-on' mobile IP applications and services on a massive scale by simplifying service creation, enabling data roaming, and scaling network performance. According to International Data Corporation, M-commerce transactions will explode to $21B by 2004 in the US market, and the Yankee Group has predicted that mobile data services in Western Europe will generate $62B in revenue by 2005 making up 32% of all service revenues.

"WaterCove Networks was founded to address the challenges facing mobile operators as they begin to deploy mobile data services. We are combining a service-aware intelligent system with data networking transport that can easily grow as data services move to mass consumer deployment levels," said Peter Lojko, President and CEO of WaterCove Networks. "Not an easy feat given that operators have to support emerging business models which include being an end-to-end service provider, enabling application and content providers access to the network, and even opening their network to Mobile Virtual Network Operators. WaterCove has zeroed in on the IP Mobility solution that gives wireless operators the flexibility to remain competitive under rapidly changing market and technology conditions."

"The deployment of advanced wireless data services is just beginning and has become a strategic initiative for mobile operators worldwide. Significant investment in the mobile data network will be needed to support the increased data traffic and migration to 3G (third generation) wireless, "always-on" technology," said Bruce Sachs, General Partner, Charles River Ventures. "New innovative services will fuel the demand and mobile operators need a flexible and intelligent infrastructure that can respond to evolving market dynamics."

"Wireless carriers don't have the infrastructure in place to rapidly and seamlessly support the increasing demand for data services," said Perry LaForge, Chairman & CEO, inOvate Communications Group. "WaterCove Networks' solution will help overcome this tremendous roadblock that's been stalling wireless industry progress. inOvate looks forward to providing access to our network of resources and wireless data domain expertise to help WaterCove quickly deliver a product to serve the needs of the mass market."

First Class Leadership
WaterCove Networks has brought together a first-rate management team and board of directors that combines entrepreneurial drive with a wealth of experience in managing wireless networks and delivering carrier-class voice and data networking products.

Peter Lojko - CEO, President, Board Member
Formerly held executive positions with Excel Switching, NextWave Telecom, American Mobile Satellite Corp. and Nynex Mobile.

Mark Tubinis - Founder and Vice President, Development
Formerly held executive positions with Innovative Telecom Corporation and Summa Four.

Jayesh Patel - Founder, Vice President, Marketing and Board Member
Formerly held executive positions Northchurch Communication Inc., Bay/Nortel Networks and Xylogics.

Wen-Khang Han - Founder and Director of Technology
Formerly held senior engineering positions at Motorola, Infinet, and Memotec Data Comm. Wen holds three patents in the area of wireless mobile communications and applications.

Paul Ciarfella - Founder and Director of Network Management
Formerly held management positions Lucent Technologies, Ascend Communications and Cascade Communications.

Full biographies for WaterCove Network's world-class management team can be found at www.watercove.com.

"WaterCove Networks has assembled a unique team that has been in the shoes of the customer and understands the challenges facing the new generation of wireless carrier," said Bob Goodman, General Partner at Bessemer Venture Partners. "Members of the WaterCove team have built some of the industry's largest wireless and most complex data networks, giving them the 'in the trenches' expertise necessary for success."

About WaterCove Networks' Investors
WaterCove Networks' investment group, Charles River Ventures, Bessemer Ventures, and inOvate Communications Group, includes some of the wireless, data communications, and telecommunications industry's most successful and respected individuals:

Bruce Sachs, General Partner at Charles River Ventures, is a Director of several private and public companies including WaterCove Networks, and has held executive positions at Ascend, Stratus Computer, Bay Networks and Xylogics.

Perry LaForge is Founder, President and CEO of the inOvate Communications Group and Director of WaterCove Networks. A 20-year wireless industry veteran, Perry LaForge is the founder and executive director of the CDMA Development Group (CDG), a trade association comprised of over 100 of the world's leading wireless operators and manufacturers.

Bob Goodman, General Partner, Bessemer Venture Partners, has over 15 years experience in the wireless industry and was founder and CEO of two successful wireless companies: Celcore, Inc. and Boatphone.

Note: Related press release issued today, "WaterCove Networks Announces Advisory Board".

About WaterCove Networks
WaterCove Networks, headquartered in Burlington, MA, was founded in 2000 and is privately held. WaterCove Networks develops next-generation networking equipment for wireless service providers looking to rapidly deploy mobile data services within their existing infrastructure and accelerate the rollout of personalized content and services using mobile appliances. The founding team combines extensive experience in the mobile wireless, data networking and telecommunication equipment industries. WaterCove Networks has received funding from Charles River Ventures, Bessemer Ventures, and inOvate Communications Group. Additional company information can be found at http://www.watercove.com.

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Note: WaterCove is a trademark of WaterCove Networks. All other trademarks are properties of their respective owners.

Contact:
Joann Anderson
River Bend Consulting
978-948-8458
joann@riverbendconsulting.com

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