Effnet issues profit warning

9/11/2002 6:06 AM EST

In light of postponed orders from customers, the board of directors and
new management of Effnet Group AB do not believe the company will
achieve its previously announced goal of positive monthly results during
the last quarter of the year. Consequently, the company will immediately
begin implementing cost-cutting measures.

"The market for the company's products continues to be weak. Customers
in the mobile 3G area are postponing implementation of these networks.
As a consequence of these delays, Effnet must also modify its business
plan. Under the current market conditions the business's costs are
unacceptably high and a restructuring appears inevitable," says Effnet's
new CEO, Göran E Larsson in a commentary.

In spite of the fact that our customers are deferring their orders, we
are still seeing a great deal of interest in our products. Effnet will
be positioned well with a product that is in demand when the market
rebounds. But despite the board's long-range faith in the product, we
have an articulated short-term goal of adapting the company's costs to
its revenues," says Effnet Chairman, Magnus Ryde.

About Effnet
Effnet develops and sells embedded software that increases the
efficiency, speed and security of IP traffic on fixed and mobile
networks to manufacturers of network products. Effnet techniques enable
optimal performance for IP packet processing. The company was founded by
leading researchers in the Header Compression field and has operations
in Stockholm, Sweden and Tucson, Arizona. Effnet Group AB is quoted on
the New Market in Sweden (symbol: EFFN). More information can be found
at www.effnet.com.

For further information please contact:
CEO Executive Vice President
Göran E Larsson Hans Runesten
Tel +46(0)8-564 605 50 Tel +46(0)8-564 605 50
Mobile +46(0)705-65 68 69 Mobile +46(0)702-80 26 26