Final Results

Embargoed for release, Friday 21 March 2003 - 07.00am (GMT)

                     BATM Advanced Communications Limited                      

               Final Results for the Year Ended 31 December 2002               

BATM Advanced Communications Limited (LSE: BVC), a leading designer and
producer of broadband data and telecoms systems, today announces preliminary
results for the year ended 31 December 2002. The results are in line with a
trading statement given on 9 January 2003.

Key features

Twelve months ended 31 December                          2002              2001
                                                                               
Turnover                                              $ 48.6m           $ 82.0m
                                                                               
Pre-tax loss before goodwill amortisation             $(9.1)m          $(11.7)m
*                                                                              
                                                                               
Loss per share before goodwill                        (2.39)c           (3.17)c
amortisation*                                                                  

*After goodwill amortisation of ($11.3m) (2001: ($255.1m)), pre-tax losses were
$20.4m (2001: loss $266.8m) and loss per share was 5.31c (2001: loss per share
69.13c)

  * Strong cash position: $55.2 m and no borrowings (2001: $56.6m)
   
  * Significant R&D programme maintained
   
  * Selling, general and administrative overheads reduced by 37% - in line with
    strategy
   
  * Awarded an exclusive contract with a leading regional Bell operating
    company in H2
   
  * Won first major contract for VOIP platform in the US
   
Dr Zvi Marom, Chief Executive of BATM, said:

'Despite continued difficult trading conditions, particularly in the USA, we
have managed to maintain our cash position and actually increase the number of
major customers we are serving in our main markets. We believe that once
markets start to recover we shall be among the first to benefit from such
recovery.'

Enquiries:

BATM Advanced Communications 020 7831 3113

Peter Sheldon, Chairman

Dr Zvi Marom, Chief Executive

Ofer Bar Ner, Chief Financial Officer

Dresdner Kleinwort Wasserstein 020 7623 8000

Mark Smith

Shore Capital 020 7408 4090

Graham Shore

Financial Dynamics 020 7831 3113

James Melville-Ross

A conference call for analysts and investors will be held at 11a.m. GMT on
Friday 21 March 2003. For further details please contact James Melville-Ross,
Financial Dynamics, on 020 7831 3113.

                             Chairman's Statement                              

Review of the Period

2002 was an extremely difficult year for our business and our industry. We
experienced an extremely harsh trading environment, fierce competition and a
significant decline in turnover from our legacy business in the US.

Our response to this has been threefold: first, we have actively worked to
manage tight cost controls; second, we have continued to focus on new product
development within core areas of the business; and third, we have aimed our
sales efforts on the businesses and regions where demand for our products is
strongest.

As a result we managed to reduce our selling, general and administrative costs
by 37% compared with 2001 and have carefully husbanded our cash resources with
the result that we finished the year with approximately the same amount of cash
as at the beginning ($55.2 million: 2002, $56.6 million: 2001).

Financial Performance

Turnover for the period was $48,661,000 (2001: $82,001,000), a decrease of 41
per cent. This decrease is a direct result of lower sales in the US market, due
primarily to the decline of our legacy business.

Gross profit margin returned to a more normal level of 39.5 per cent (2001:
34.1 per cent), an increase mostly arising as a result of inventory write down
in 2001, which was not repeated this year.

Selling, general and administrative expenses were reduced by 37 per cent as we
have sought to address the effects of the downturn by reducing non-core
expenditure.

Gross research and development expenditure in this period was $12,779,000
(2001: $15,655,000). However, after contributions from the Israeli Chief
Scientist, US-IS Foundation and from the European Community, net research and
development expenditure was $12,185,000 (2001: $14,293,000).

Operating loss, before goodwill amortization, amounted to $10,499,000 (2001:
loss $14,033,000). Operating loss after goodwill amortization was $21,802,000
(2001: loss $269,133,000).

Financial income was $1,388,000 (2001: $2,221,000), reflecting lower interest
rates on largely unchanged cash and other investment balances.

The loss before tax, excluding the effect of the amortization of goodwill, was
$9,120,000 (2001: loss $11,747,000). Loss after taxes and minorities, excluding
the effect of the amortization of goodwill, was $9,267,000 (2001: loss
$12,256,000), giving a loss per share of 2.39 cents (2001: loss 3.17 cents).
Actual loss after taxes, including the effect of goodwill, amortization
amounted to $20,570,000 (2001: loss $267,356,000), giving a loss per share of
5.31 cents (2001: loss 69.13 cents).

The balance sheet remains strong with cash of $55.2 million at the period's end
comprised as follows: Cash and deposits, up to three months duration of $15.5
million; short-term deposits, up to one year of $3.7 million; and long-term
deposits for more than one year of $36 million.

Sales and Marketing

The difficult market conditions resulted in a major drop in turnover from our
legacy products in the US, a trend that is continuing into the current year.
This is the major reason for our lower turnover in 2002. However, we believe,
we have maintained our position as a viable vendor to the major US carriers.
This has been demonstrated by our recent success in securing a major contract
with a leading US carrier (announced at the interims) and by our continuing
ability to get new products approved at the carriers' networks. Furthermore, we
have actually increased the number of major customers we are serving in our
main markets despite the difficult conditions.

As we have seen many small carriers in the US either disappear or remain in a
potentially insecure financial situation, we are maintaining our focus on the
major carriers. We have also increased our focus on the wireless providers'
market where demand for our products is relatively strong.

During 2002 we have expanded our relationship with major vendors and expect it
to continue to grow in 2003.

The Far East remains a significant potential market for our products and this
area of opportunity for us has begun to develop. A number of substantial
contracts for our products have been entered into and we anticipate a
significant contribution from this area in the coming years.

Our business in Europe remained relatively strong and we expect it to continue
in this way in 2003.

Research & Development

During 2002 we introduced several new products to both our IP and TDM
portfolios. In our IP portfolio, we have successfully introduced and deployed
our new Edgegate 'Fiber to The Home' solution as well as our new T5C for
carriers' networks. The new T5C has been certified by 2 major US carriers for
deployment in their internal networks. On the TDM side, we added a HUB solution
to our M13 offerings. This product includes 9 DS1 to DS3 multiplexors in one
compact box. This product is at testing stages with several major carriers. We
also introduced in early March 2003 our first product in the SONET space - the
OTM 1000. This product can drop both traditional DS1 and DS3 services as well
as Ethernet from an OC 3 connection.

Notwithstanding the unsatisfactory state of the market we firmly believe that
our policy of continuing to commit to a significant R&D programme is a policy
that will stand us in good stead for the future.

Investment

Our Israeli associated company, Eldor Computers Limited, has made a significant
improvement this year that has resulted in a profit of $350,000 on revenues of
approximately $25million. As we own 49.9% of the company, our share of turnover
is not included in these statements. The net results are, however, included, on
an equity basis, in the Consolidated Profit and Loss Accounts under Group's
share of income (loss) from associated companies.

Outlook

We do not anticipate an early return to the levels of activity of recent years
but remain confident that our strategy for preparing for the upturn in
business, which will surely come, is sound. We will continue to maintain a
cautious view of the market and to adjust our

expense levels to match lower turnover levels, so that we return to
profitability at an early date.

During the current year we will increase our focus on our OEM customers for
both our IP and TDM product lines. We will maintain a substantial R&D programme
and continue to develop our line of IP switches to support major fibre
deployment projects. This will include enhancements to our software platform as
well as several new hardware platforms to be released in 2003. We will also
carry out further development of our alarm aggregation platforms and SONET
terminal multiplexors.

We will also maintain our policy of a strict control on our cash resources,
which are such an important part of the stability on which we have built this
business.

We are not immune from one of the most severe and sharp deterioration in
business confidence that we have ever witnessed. BATM's business is, however, a
solid one and our policies are based on conservative but sound principles. We
are confident that we will emerge from this difficult period in good shape.

                       BATM ADVANCED COMMUNICATIONS LTD.                       

                     CONSOLIDATED PROFIT AND LOSS ACCOUNTS                     

                                                        Year ended December 31,   
                                                                               
                                                        2 0 0 2        2 0 0 1    
                                                                               
                                                       US$ 000's      US$ 000's   

Turnover                                                  48,661        82,001 
                                                                               
Cost of sales                                             29,440        53,991 
                                                                               
Gross profit                                              19,221        28,010 
                                                                               
Operating expenses                                                             
                                                                               
Research and development costs                            12,779        15,655 
                                                                               
Less - participation                                         594         1,362 
                                                                               
Research and development costs, net                       12,185        14,293 
                                                                               
Selling, general and administrative expenses              17,535        27,750 
                                                                               
Amortization and write-off of Goodwill                    11,303       255,100 
                                                                               
Total operating expenses                                  41,023       297,143 
                                                                               
Operating loss                                          (21,802)      (269,133)
                                                                               
Financial income, net                                      1,388         2,221 
                                                                               
Other income (expenses), net                                 (9)            65 
                                                                               
Loss before taxes on income                             (20,423)      (266,847)
                                                                               
Taxes on income                                                4         (267) 
                                                                               
Loss after taxes on income                              (20,419)      (267,114)
                                                                               
Group's share in net loss of associated company            (151)          (242)
                                                                               
Retained loss for the year                              (20,570)      (267,356)
                                                                               
Loss per share (in cents)                             (5.31)           (69.13) 
                                                                               

                       BATM ADVANCED COMMUNICATIONS LTD.                       

                          CONSOLIDATED BALANCE SHEETS                          

                                                          December 31,         
                                                                               
                                                        2 0 0 2        2 0 0 1    
                                                                               
                                                       US$ 000's      US$ 000's   

Fixed assets                                                                   
                                                                               
Tangible assets                                           11,160        12,770 
                                                                               
Goodwill                                                  22,271        32,169 
                                                                               
Total fixed assets                                        33,431        44,939 
                                                                               
Current assets                                                                 
                                                                               
Stocks                                                    13,446        21,027 
                                                                               
Debtors                                                    8,725        18,292 
                                                                               
Short term investments                                     3,682         4,923 
                                                                               
Cash and cash equivalents                                 15,519        51,697 
                                                                               
                                                          41,372        95,939 
                                                                               
Creditors: amounts falling due within one year            11,638        24,600 
                                                                               
Net current assets                                        29,734        71,339 
                                                                               
Long Term Investments                                                          
                                                                               
                                                          35,978            --
                                                                               
Long term deposits                                                             
                                                                               
Investments in associated companies                        1,453         2,676 
                                                                               
Investments in other companies                             3,688         5,688 
                                                                               
                                                          41,119         8,364 
                                                                               
Total assets less current liabilities                    104,284       124,642 
                                                                               
Non-current liabilities                                                        
                                                                               
Severance pay fund, net of provision                       (330)          (295)
                                                                               
Net assets                                               103,954       124,347 
                                                                               
Capital and reserves                                                           
                                                                               
Share capital                                              1,175         1,173 
                                                                               
Additional paid-in capital                               397,419       397,244 
                                                                               
Foreign currency translation adjustment                       16            16 
                                                                               
Profit and loss account                                (294,656)      (274,086)
                                                                               
Shareholders' funds                                      103,954       124,347 

                       BATM ADVANCED COMMUNICATIONS LTD.                       

                     CONSOLIDATED STATEMENTS OF CASH FLOWS                     

                                                       Year ended December 31,   
                                                                               
                                                        2 0 0 2        2 0 0 1    
                                                                               
                                                       US$ 000's      US$ 000's   

Net cash inflow (outflow) from operating                 (2,959)         1,730 
activities                                                                     
                                                                               
Investing activities                                                           
                                                                               
Repayment of loan to associated company                    1,069           473 
                                                                               
Acquisition of fixed tangible assets                       (509)        (2,817)
                                                                               
Proceeds from sale of fixed tangible assets                   28            20 
                                                                               
Proceeds from short term bank deposits                     1,253        45,207 
                                                                               
                                                        (35,222)            --
                                                                               
Investment in long term bank deposits                                          
                                                                               
Proceeds from (investment in) marketable                     (8)           325 
securities, net                                                                
                                                                               
Net cash inflow (outflow) from investing                (33,389)        43,208 
activities                                                                     
                                                                               
Financing activities                                                           
                                                                               
Exercise of options and shares by employees                  177           140 
                                                                               
Repayment of short-term credit, net                          (7)         (636) 
                                                                               
Net cash inflow (outflow) from financing                     170          (496)
activities                                                                     
                                                                               
Increase (decrease) in cash and cash equivalents        (36,178)        44,442 
                                                                               
Cash and cash equivalents at the beginning of the         51,697         7,255 
year                                                                           
                                                                               
Cash and cash equivalents at the end of the year          15,519        51,697 
                                                                               

RECONCILIATION OF NET PROFIT FOR THE YEAR TO NET CASH INFLOW (OUTFLOW) FROM
OPERATNG ACTIVITIES

                                                          Consolidated         
                                                                               
                                                    Year ended December 31,    
                                                                               
                                                       2 0 0 2         2 0 0 1    
                                                                               
                                                     US$ 000's       US$ 000's   

Loss for the year                                     (20,570)        (267,356)
                                                                               
Company's share in loss of associated company              151              242
                                                                               
Amortization and write off of goodwill                   9,898         255,100 
                                                                               
Write-down of investment in a company                    2,000               --
                                                                               
Write-off of fixed assets                                   --             616 
                                                                               
Depreciation and amortization                            2,082           2,973 
                                                                               
Increase (decrease) in severance pay fund, net              35             (29)
of provision                                                                   
                                                                               
Decrease in stocks                                       7,581           7,235 
                                                                               
Decrease in debtors                                      9,567           7,752 
                                                                               
Decrease in creditors                                 (12,955)          (4,902)
                                                                               
Loss from marketable securities                             38             115 
                                                                               
Interest incurred on investments                         (798)             (88)
                                                                               
Interest incurred on loan for affiliate                      3              47 
                                                                               
Loss on disposal of fixed assets                             9              25 
                                                                               
Net cash inflow (outflow) from operating               (2,959)           1,730 
activities                                                                     

Notes:

 1. The financial information for the years ended 31 December 2002 and 31
    December 2001 is extracted from the Company's audited financial statements
    for those periods which carried an unqualified audit report. The annual
    report and audited financial statements will be sent to shareholders
    shortly.
   
 2. Loss per share for the years ended 31 December 2002 and 31 December 2001
    are calculated using 387,783,799 shares in issue in 2002 and 386,712,251
    shares in issue in 2001.
   
 3. Further copies of this announcement are available from the offices of 
    Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB.