14/10/1999

INTERIM REPORT For the period January 1, 1999- September 30, 1999

MARKET OVERVIEW

Net Insight operates in a rapidly changing market. The continuous enhancement of the communication infrastructure is driven by market forces, where the consumers' demand for better picture quality, more services and interactivity are vital. These conditions, combined with the growth of the Internet, is forcing operators and suppliers of equipment to continually look for new products that can meet the increased demand for broadband and quality service.

The fastest rate of growth is currently in the Nordic countries, but there is a similar trend in large areas of the rest of Europe, USA and Asia.

During 1999, the development of new network technology has enjoyed a great deal more interest from both the media and the public, which has contributed to many decisions concerning expansion of the broadband network being under discussion. To a great extent this means city networks that are mainly constructed using fiber optics, giving the new networks the opportunity to manage several parallel networks using the same fiber-optic cable, in addition to a general increase in capacity.

This gives Net Insight a very strong market position, as the company's products can easily increase in speed with fiber optics and can be connected directly to the fiber networks without requiring intermediate equipment.

The rapidly evolving wireless Internet represents the major challenge for all players, suppliers, operators, etc., and consumers. The number of wireless Internet users will equal that of the wireline Internet users already in year 2004. Net Insight is extremely well positioned to develop successfully in the wireless Internet market.

Net Insight's DTM technology thus creates the conditions for transmitting large amounts of without bottlenecks and at the highest quality. This gives the operators increased business opportunities for responding to rapidly increasing demand for services such as IP based digital TV, video-on-demand, IP telephony, games and high-speed Internet access.


STAFF

During the period, the number of employees in the group has increased from 67 to 69. By the end of the period 19 consultants were contracted.

An increasing proportion of ongoing recruitment relates to the build-up of the international marketing organization.


REVENUE AND COSTS

During the period the group has reported its first sales revenue, mainly to distributors, which amounted to SEK 0.4 million. Business costs for the first nine months amounted to SEK 79 million, of which SEK 27 million relates to the third quarter. SEK 2.2 million of the quarterly costs are directly related to the recent move to new premises.


INVESTMENTS IN FIXED ASSETS

Investments in instruments, equipment and improvements to premises for the first nine months amounted to SEK 0.7 million. No development costs were activated.


CASH POSITION AND FUNDING

By virtue of the authority given to the board by the Annual General Meeting in May 1999, during the period a new rights issue, of up to approximately SEK 150 million, with preference for the company's stockholders, has been made. Since the completion date for this is October 1, this is accounted for under the entry 'current rights issue' on the consolidated balance sheet. Liquid assets in the form of cash and bank balances amounted to SEK 27.6 million at 30 September 1999.


FORTHCOMING REPORTS FROM NET INSIGHT

· Press release of annual figures for 1999 - 31 January 2000

Stockholm, October 14, 1999


Bengt Olsson
Chief Executive Officer

This interim report has not been inspected by the company's auditors.

The full interim report including tables is available to download from the enclosed link.

Interim report For the period January 1, 1999- September 30, 1999