Mr. Peter Allen reports

DRAGONWAVE ESTABLISHES A FUTURE CHANNEL STRATEGY

DragonWave Inc. has reshaped its channel strategy to primarily position its latest and new products directly to customers. An important part of this is the mutual understanding that DragonWave has reached with Nokia on the companies' future relationship.

Nokia and DragonWave will focus their future relationship on the following:

• Supply of legacy products:
  • Nokia will continue to be DragonWave's main channel to supply the Harmony Flexipacket Multiradio product family and legacy products.
• Support of installed base:
  • DragonWave will continue to provide software maintenance and Level 3 hardware support to Nokia for the large installed base of network elements deployed by DragonWave and Nokia to date.
• New products:
  • Nokia and DragonWave may mutually agree on a case-by-case basis to address additional future specific customer requests of new DragonWave products through Nokia. For DragonWave this focused approach will replace the current open ecosystem environment.

To facilitate these continuing activities, DragonWave and Nokia's global frame agreements will continue in place.

"We believe that this change in our channel approach will position us better for the future. Recently the landscape in the Nokia channel changed, and in anticipation of further changes, we have reconsidered our channel strategy," said DragonWave president and chief executive officer Peter Allen. "In the future, DragonWave plans to refocus on more of a direct touch with customers but will remain flexible in seeking to serve customers in the manner in which they wish to be served. I am pleased that we have reached a clear understanding with Nokia on the future areas for our collaboration."

We seek Safe Harbor.