ALCATEL POSITIONED TO CAPITALIZE ON CHINESE WIRELESS.

Alcatel, Paris, France, has announced that it is well positioned to capitalize on the explosive market opportunity in China by anticipating the upcoming allocation of broadband wireless licenses. With licenses scheduled to be awarded in 2001, Alcatel is actively engaged in pre-licensing trials with a significant number of potential licensees, giving the company a first to market advantage. The pre-license trials, which include both Alcatel LMDS (local multipoint distribution service) and Alcatel Wireless IP, will enable service providers who receive licenses to immediately begin delivering revenue generating services once the spectrum is allocated.

"With the huge potential market for broadband services in China, the upcoming broadband wireless license allocations are eagerly anticipated," said Jamie Mendelson, analyst, Strategis Group. "Vendors, such as Alcatel, who are already actively engaged in trials with potential licensees have a key advantage in this market."

Dominique de Boisseson, chairman and CEO, Alcatel China said: "The emerging broadband wireless industry in China represents an incredible opportunity, and Alcatel is fully committed to providing the technology and support to enable service providers to quickly and cost-effectively begin delivering revenue generating services. With ongoing trials of both our LMDS and Wireless IP solutions, Alcatel is looking forward to capturing a significant portion of the broadband wireless business in China in the coming year."

Alcatel LMDS is a fixed broadband wireless network that operates in spectrum bands above 10 GHz and can be quickly deployed, enabling service providers to cost-effectively deliver high speed Internet, data, and voice services to business customers. The solution provides fiber- equivalent bandwidth that effectively bypasses the traditional local loop, offering service providers an alternative method to access customers. Alcatel Wireless IP operates in the 2.6 and 3.5 GHz bands and is ideally suited to service providers targeting residential and SOHO (small office/home office) markets.

Alcatel has already established a significant foothold in the broadband wireless market in the Asia Pacific region. Since launching commercial LMDS in July 2000, Korea's Hanaro Telecom has been using the Alcatel LMDS solution to offer high speed Internet service in densely populated regions across the country. With more than 10,000 customers currently on the network, the commercial availability of Alcatel equipment has enabled Hanaro to continue to add approximately 1000 new customers per week. Similarly, with an unprecedented speed of execution, Cable & Wireless Optus affiliate, Agility Networks, was able to roll out services using Alcatel LMDS the day after receiving their spectrum license. Services enabled by Agility's network include high speed data applications such as Internet and a range of multimedia services. Alcatel is also working with Japan Telecom to explore the benefits that the Alcatel LMDS solution can offer the Japanese market.

About Alcatel

Alcatel (Paris: CGEP.PA and NYSE: ALA) builds next generation networks, delivering integrated end-to-end voice and data networking solutions to established and new carriers, as well as enterprises and consumers worldwide. With 130,000 employees and sales of EURO 31 billion in 2000, Alcatel operates in more than 130 countries.

Supporting Alcatel's leadership in the broadband access market - including DSL and DLC - Alcatel is currently the LMDS broadband wireless access market leader with over 6,000 base station sectors shipped and more than 100 customers in commercial and trial deployments. Alcatel's success in LMDS broadband wireless access can be attributed to:

- Reliable, high performance products available NOW for mass commercial deployment.

- Availability of end-to-end networking solutions including products for Core, Edge, Transmission, and Network and Service management.

- Global turnkey deployment experience combined with strong local/in- country presence and deployment support.

- Full range of pre-and post-license support services, including business case analysis, network design and engineering, and customised financing assistance when applicable.

The comprehensive Alcatel LMDS solution is a multiservice broadband wireless

network comprised of base station and customer premises equipment, and network and service management.