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DSP Group to Represent NTT's Patents for G.723.1 Technology

Santa Clara, Calif., September 24, 1997 -- DSP Group, Inc. (NASDAQ: DSPG) today announced that it has signed a Memorandum of Understanding with Nippon Telegraph and Telephone Corporation (NTT) to represent NTT's intellectual property for the G.723.1 speech compression technology. G.723.1 is a widely accepted speech coder used in standards-based desktop video conferencing and videophones working over regular phone lines and in Internet telephony applications. This agreement grants DSP Group the non-exclusive right to extend the NTT patents not only to new licensees but also to organizations already signed with DSP Group. NTT has also retained the right to grant licenses independent of DSP Group.

"Currently DSP Group licenses the patents for the co-developers of this technology, AudioCodes Ltd., France Telecom, University of Sherbrooke and DSP Group. There are other organizations holding patents for G.723.1, and our agreement with NTT helps ease the licensing process and brings us closer to the ideal solution of one-stop shopping," said Serdar Yurdakul, vice president of computer telephony products at DSP Group. "This is certainly a step in the right direction, and we hope the other patent holders will join this group to help the industry".

G.723.1 was adopted by the ITU (International Telecommunication Union) in 1995, and earlier this year, the IMTC's (International Multimedia Teleconferencing Consortium) Voice Over IP (VoIP) forum also approved G.723.1 as the baseline low bit rate speech coder for IP telephony applications. The IMTC is a non-profit organization with membership of over 140 companies from various industries, and promotes the ongoing development and adoption of international data and video conferencing standards and interoperability.

Current applications for the G.723.1 standard include PC-based, standalone or set-top video and audio conferencing products targeting consumer and multimedia communication markets and IP telephony client, server and gateway products. G.723.1, which already has a worldwide installed base of millions, provides high quality speech and interoperability among many manufacturers' products.

To date G.723.1 has been licensed by organizations such as Microsoft, Intel, PictureTel, Dialogic, USRobotics, 8x8, ADI, Rockwell, VDONet, Vivo Software, Smith Micro, White Pine, and VoxWare, among others.

DSP Group Inc. (NASDAQ:DSPG) is a global leader in the development and marketing of high-performance, cost-effective digital signal processing cores used in a wide range of applications such as wireless communications, telephony and personal computers. By combining its DSP core technology with its advanced speech processing algorithms, DSP Group also delivers enabling application-specific DSPs to manufacturers of telephones, computers and consumer electronics. DSP Group is located in Santa Clara, California. For more information, visit DSP Group's web site at http://www.dspg.com. This press release is also available through the company's News on Call fax service, that can be reached at (800) 758-5804, company code 112025.

All trademarks and registered trademarks are the property of their respective owners. All rights reserved worldwide

Serdar Yurdakul
Vice President
Computer Telephony Products
(408) 986-4300

Yizhar Ganor
Director, Investor Relations
(408) 986-4424
ir@dspg.com