CHIPCOM AND BRITISH TELECOM TO DEVELOP NEW MANAGED LAN SERVICE

SOUTHBOROUGH, Mass., July 18, 1995 -- Chipcom Corporation (Nasdaq/CHPM) and
British Telecommunications plc (BT) today announced they have agreed to a
worldwide reseller agreement. This is the first step towards the two
companies delivering an innovative new Managed Local Area Network (LAN)
Service.

Both companies have identified that many customers are concerned about the
rapid change in LAN technologies, and, as a result, are failing to take
advantage of the benefits these technologies can bring to their
organizations.

"Many organizations are already enjoying the benefits of Managed Services
from BT in the wide area," said Duncan Ingram, Manager, Integrated
Services, at BT. "This new service will bring those benefits to the
desk-top."

According to Bruce L. Cohen, Chipcoms senior vice president, worldwide
field operations, "The combination of BTs unrivaled service capabilities
and Chipcoms unique fault-tolerant architecture will deliver a LAN service
that not only delivers lower cost of entry and cost predictability, but
also allows customers to upgrade to new technologies without significant
penalties. Today, most technology upgrades require the disposal of a large
part of the LAN infrastructure, resulting in a significant investment
being written off. This new service removes that risk."

Trials of the new service are taking place over the next three months, with
a view to the service being fully available towards the end of the year.

Founded in 1983, Chipcom Corporation designs, manufactures, markets and
services fault-tolerant intelligent switching systems, including hub,
internetworking and network management products, for remote site, campus
and enterprise network computing environments. The Southborough,
Mass.-based company reported record revenue of $268 million for its 1994
fiscal year, ended December 31, a 67 percent increase over 1993.

According to the market research firm Dataquest, Inc., Chipcom is the
world's third largest supplier of intelligent hubs. Together with its
resellers, Chipcom has a presence in more than 40 countries, and the
company employs over 925 people worldwide. For the third consecutive year,
Chipcom has been cited by Fortune magazine as one of the 100
fastest-growing companies in America.
 
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