@Home Network Reports Subscriber Base Grows to 147K

Upgraded Homes Passed Increases to 7.9M

@Home’s Distribution Reach Expands to Approximately 60 Million Homes Passed Worldwide

REDWOOD CITY, Calif., July 15, 1998 -- @Home Network™ (Nasdaq: ATHM) today reported revenues totaling $9.2 million for the second quarter ended June 30, 1998, a 60% increase over revenues of $5.8 million reported in the first quarter ended March 31, 1998. The net loss for the second quarter was approximately $11.1 million, or $0.10 per share, compared to $11.7 million, or $0.10 per share, before a non-cash charge in the first quarter of $83.3 million. This non-cash charge was related to the fair value of common stock warrants issued to cable system operators in connection with distribution agreements. Including the non-cash charge, the net loss for the first quarter of 1998 was $95.0 million, or $0.85 per share. Revenue and net loss for the second quarter of 1997 were $1.0 million and $11.9 million, respectively. Weighted average shares outstanding were 112.6 million for the quarter ended June 30, 1998, excluding shares reserved for outstanding warrants and employee stock options.

Revenue for the six months ended June 30, 1998 was $15.0 million, a 719% increase over revenues of $1.8 million for the six months ended June 30, 1997. The net loss for the six months ended June 30, 1998, before the non-cash charge taken in the first quarter, was $22.8 million, or $0.20 per share. Including the non-cash charge, the net loss for the six month period was $106.1 million, or $0.95 per share.

After less than two years of commercial availability, @Home™ now serves approximately 147,000 cable modem subscribers across North America, an increase of 63% from 90,000 subscribers reported at March 31, 1998. @Home’s cable modem subscriber base has nearly tripled since the beginning of 1998. The base of homes with access to two-way upgraded plant increased to 7.9 million at June 30, 1998 from 5.7 million at March 31, 1998. These numbers include Internet access subscribers served by new @Home affiliates that are currently being converted to the @Home service, as well as these affiliates’ upgraded homes passed.

In addition, during the second quarter of 1998, the @Home service was launched in five new markets, raising the total number of active U.S. and Canadian markets to 31. @Work™ continued its significant contribution to @Home Network’s growth, ending the second quarter with more than 1,000 installed accounts. @Work’s installed accounts also have tripled since the beginning of the year.

Commenting on the company’s results, Tom Jermoluk, chairman, president and CEO of @Home Network, said, "We believe the cable infrastructure is clearly the vehicle of choice for offering a full range of voice, video and Internet services to consumers in the home. With eighteen cable partners, including seven of the ten largest cable operators, now affiliated with @Home, we are the premier driver of high-speed Internet services via the cable pipeline."

Through the addition of ten new cable affiliates during the quarter, @Home expanded its exclusive distribution footprint to approximately 60 million homes passed by cable worldwide. Three of the affiliates are international operators: Dutch cable companies CasTel and Palet Kabelcom, that signed definitive agreements with @Home; and United Kingdom cable and telecommunications operator ComTel that entered into an agreement in principle.

Additionally, @Home launched a multi-faceted marketing campaign in an effort to build upon the @Home brand and drive subscriber growth. This campaign includes an agreement with Computer City, one of North America's largest computer superstore retailers, to merchandise, install and support the @Home service in targeted retail locations throughout North America. Finally, @Home continued to improve upon its service offerings through numerous agreements with leading content and service providers including the NBA, SegaSoft, K-TEL and Travelocity.

@Work further demonstrated its commitment to providing businesses with the best data solutions available through an agreement with NorthPoint Communications, a data Competitive Local Exchange Carrier (CLEC). This agreement expands @Work’s transport portfolio to include a digital subscriber line (DSL) transport option for small and medium-sized businesses.

Cash and short-term investments as of June 30, 1998 totaled $91.2 million. Capital expenditures in the second quarter of $7.3 million and for the first half of 1998 of $14.1 million supported the growth in the infrastructure necessary to roll out @Home and @Work services. Depreciation and amortization was $3.5 million and $6.3 million for the second quarter and first half of 1998 periods, respectively.

@Home Network distributes high-speed Internet services to consumers and businesses using its own network architecture and a variety of transport options centered on the cable industry’s hybrid-fiber coaxial infrastructure. The cable connection provides users significant increases in speed over conventional Internet services and easy-to-use navigation. Leveraging the "always on" attributes of cable, @Home allows for unique multimedia applications that go beyond current Web experiences. Since its founding in 1995, @Home Network has reached affiliate agreements with fifteen leading cable companies in North America: Tele-Communications, Inc., Cablevision Systems Corp., Comcast Corporation, Cox Communications, Bresnan Communications Company, Insight Communications, Jones Intercable, Garden State Cable, Cogeco, Lenfest Communications, InterMedia Partners, Marcus Cable, Century Communications, Rogers Cablesystems Limited, and Shaw Communications.

Traded on Nasdaq under the symbol ATHM, @Home Network is based in Redwood City, California. Additional information about @Home Network is available on the Internet at http://www.home.net.

This press release contains forward-looking information within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbors created by those sections. These forward-looking statements include statements related to the future potential of the cable infrastructure for delivering high speed services and @Home Network’s ability to develop and deploy these services. Actual results may differ materially due to a number of risks, including: the success of telecommunication and wireless service providers in deploying competitive high speed services; the technological, operational and financial challenges faced by @Home Network in developing and deploying such high speed services; and the degree to which customers will desire such services. In addition, the ComTel transaction described in this press release is contingent upon the parties’ success in executing a definitive agreement, and there can be no assurance that this transaction will be completed. The matters discussed in this press release also involve risks and uncertainties described from time to time in @Home Network’s filings with the Securities and Exchange Commission. In particular, see the risk factors described in @Home Network’s Form 10-Q for the quarter ended March 31, 1998; Form 10-K for the year ended December 31, 1997 and the Final Prospectus for @Home Network’s initial public offering. @Home Network assumes no obligation to update the forward-looking information contained in this press release.