Ditech Networks and SimulScribe Establish a Strategic Relationship to Market Voice to Text Applications

Mountain View, California, September 11, 2009 – Ditech Networks (NASDAQ: DITC),a global leader in mobile voice processing applications, today announced it has entered into a strategic relationship with SimulScribe, in which Ditech Networks will be the exclusive global marketing and sales partner for SimulScribe’s voice-to-text (VTT) applications to service providers and enterprises.

VTT is a growing, revenue-generating voice application that is being offered by many carriers around the world. The combination of SimulScribe’s VTT products and Ditech Networks’ Voice Quality Assurance (VQA), mStage and toktok products will enable Ditech to offer an extensive suite of voice capabilities to carriers. Specifically, as a result of the strategic relationship:

Markets and channels – Ditech Networks will immediately begin selling SimulScribe’s VTT through Ditech’s carrier relationships.

Voice Quality Technology – Ditech Networks will integrate VQA with SimulScribe’s VTT products, increasing the accuracy of VTT in typical usage environments.

Voice Applications – Ditech Networks will integrate the SimulScribe API with its voice application APIs, providing carriers with an extensive suite of voice 2.0 capabilities.

Effective immediately, Ditech Networks will begin offering SimulScribe’s SimulAuto, SimulHybrid, and ScribeALL products. SimulAuto, available as an Internet-based cloud service or on premises, is a fully automated, real-time API transcription service that runs on voice recognition technology with SimulScribe’s proprietary models. SimulHybrid adds human-based correction to SimulScribe’s exclusive VTT technology to deliver the highest quality voice transcription. ScribeALL is a real-time, highly accurate platform designed for any file that needs transcription, regardless of the application.

“Ditech Networks researched the voice-to-text market extensively before selecting Simulscribe. We were impressed with SimulScribe’s technology and platform and are excited about pursuing opportunities in the voice transcription market,” said Todd Simpson, President and CEO of Ditech Networks. “Combining VTT with our existing VQA and Voice Applications, we believe, will strengthen Ditech Network’s position in the voice application market.”

“We believe SimulScribe has the most accurate automated VTT,” said Jamie Siminoff, a co-founder of SimulScribe. “Additionally, VTT is becoming a standard product for carriers, and Ditech Network’s carrier relationships will further help us to penetrate this space.”

In exchange for the exclusive rights to sell SimulScribe’s VTT products to carrier and enterprise customers, as well as the assumption of SimulScribe’s existing carrier and enterprise customers, Ditech Networks will pay SimulScribe $3.5 million upon signing, and an additional $3.5 million at the end of the second year of this relationship. Further, based on meeting certain revenue targets, SimulScribe can earn an additional $10 million over three years. SimulScribe has the option to convert portions of this compensation into Ditech Networks stock

To learn more about the products and services described herein, please visit www.ditechnetworks.com or www.simulscribe.com.

ABOUT DITECH NETWORKS

Ditech Networks is revolutionizing modern communications with advanced voice processing solutions that perform tasks spanning from voice-enabled Web 2.0 and unified communications services to network and speech enhancement. Ditech Networks believes in the power and simplicity of human speech; its technology is being designed to deliver compelling voice capabilities to new communications methods like social networking and text messaging, allowing consumers to use voice in ways that make sense in today’s Web 2.0-savvy world.

Leveraging over 15 years of deployments with communications providers around the world, Ditech Networks offers unique, effective products and services that put the subscriber’s experience first, assisting carriers with revenue generation, service differentiation, network expansion and call capacity. Ditech Networks’ customers include Verizon, Sprint/Nextel, Orascom Telecom, AT&T, China Unicom, Global Crossing and West Corporation. Ditech Networks is headquartered in Mountain View, California. For more information, visit www.ditechnetworks.com.

ABOUT SIMULSCRIBE

SimulScribe empowers carriers and developers to transcribe voice into text. SimulScribe’s voice-to-text platform, which powers the award winning PhoneTag voicemail-to-text service, has been recognized as the top platform by PC Magazine, LapTop Magazine and the Applied Voice Input/Output Society (AVIOS) among others. SimulScribe’s technology is the most utilized voicemail transcription platform in the United States. For more information visit www.SimulScribe.com.

Forward Looking Statement This press release contains forward-looking statements regarding Ditech Networks’ expectations of the capabilities of and the benefits from using SimulAuto, SimulHybrid, and ScribeALL, the timing of sales of these products, and the benefits of combining Ditech Networks’ VQA with these products. Actual performance of these products could differ materially as a result of unanticipated factors and events, including that the mStage API’s are currently in product development and Ditech Networks could experience unexpected difficulties in their development. Additionally, Ditech Networks could face unforeseen difficulties in integrating VQA and its API’s into SimulScribe’s VTT products and API, and in marketing and selling SimulScribe’s products. Further risks inherent in Ditech Networks’ business are detailed in the section entitled “Future Growth and Operating Results Subject to Risk” in Ditech Networks’ Quarterly on Form 10-Q for the quarter ended July 31, 2009 (filed September 2, 2009 with the Securities and Exchange Commission).

Principals of Fairmount Partners acted as advisors to Ditech Networks in this relationship.

Fairmount Partners is a registered Broker Dealer, member FINRA (www.finra.org) and SIPC (www.sipc.org).

Contact: Charles M. Robins, Managing Director