Agere Systems, Alcatel Optronics, Nortel Networks Announce Multisource Agreement for Compact EDFAs for Optical Networking Systems.

Business Editors & High-Tech Writers

OTTAWA--(BUSINESS WIRE)--Feb. 13, 2002

Agere Systems (NYSE:AGR.A), Alcatel Optronics (Paris:CGO)(Nasdaq:ALAO) and Nortel Networks (NYSE:NT)(TSE:NT.) today announced a multi-source agreement (MSA) for compact Erbium Doped Fiber Amplifiers (EDFAs) used in optical networking systems.

The agreement establishes a standard that specifies uniformity for product package outlines, pin function definitions, and optical and electrical characteristics. Agere, Alcatel Optronics and Nortel Networks will independently develop and market compact EDFAs based on this standard, ensuring that optical systems manufacturers have a choice among compatible sources.

Compact EDFAs offer condensed, small form factor packaging with high flexibility at low cost. These devices target single-channel or narrow-band applications from the metro edge to ultra long haul, and are typically used when a quantity of channels are split off of the main networking path to a switch elsewhere in the network.

Compact EDFAs improve system performance by overcoming optical power or attenuation losses inherent with multiplexers or demultiplexers. This adds more flexibility in optical add/drop switch applications, and delivers preamp functionality in receivers to extend the reach of long and ultra long haul systems.

"The MSA founder members have created a strong physical standard for these exciting new amplifiers," said Pat Walsh, vice president, Product Line Management, Optical Components, Nortel Networks. "In today's market, it is important that customers have the assurance that these components can be sourced from more than one vendor. This MSA provides an avenue to creating that security of supply."

"MSAs have become strategically important for opto-electronic component manufacturers as they secure the implementation of new generation optical platforms for our customers," explained Philippe Bregi, Chief Operating Officer of Alcatel Optronics. "Standardization and integration is key to optimizing the design and lowering the cost of optical systems. It gives flexibility and simplifies system manufacturing. This MSA by three leading optical component vendors is the first real step towards optical amplification standardization and opens the door to many others."

Through this multisource agreement, system designers can feel more confident about getting the components they need and being able to incorporate them without costly and time consuming system redesign. Under the terms of the MSA, Agere, Alcatel Optronics and Nortel Networks are expected to manufacture compact EDFAs that conform to specified packaging dimensions and pin functionality, and meet or exceed specified optical and electrical characteristics. The MSA specifications will be made available shortly.

Agere Systems is the world's No. 1 provider of components for communications applications with leadership in optical components and integrated circuits. This dual capability uniquely positions Agere to deliver integrated solutions that form the building blocks for advanced wired, wireless, and optical communications networks. Agere also designs and manufactures a wide range of semiconductor solutions for communications-related devices used by consumers such as cellular phones, modems, and hard disk drives for personal computers and workstations. In addition, the company supplies complete wireless computer networking solutions through the ORiNOCO product line. More information about Agere Systems is available from its Web site at www.agere.com.

Alcatel Optronics (Paris:CGO)(Paris:PA)(Nasdaq:ALAO) is a global player which designs, manufactures and sells high performance optical components and subsystems for terrestrial and submarine optical telecommunications networks. With particular expertise in DWDM components for high bit-rate and metro systems, the company's wide product technology portfolio well positions Alcatel Optronics to respond to rapidly evolving requirements of optical networks. Alcatel Optronics can be found on the Web at www.alcatel.com/optronics.

Nortel Networks Optical Components is a world innovator in the design, development and manufacture of components for optical networking, from discrete optical components to advanced circuits and modules. One of the largest optical component businesses globally, it has established decades of leadership in opto-electronics, microelectronics, and systems knowledge and creates integrated solutions that accelerate the power and reach of communications systems around the world.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro and Enterprise Networks, Wireless Networks and Optical Long Haul Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

This release contains forward-looking statements based on information available to Agere as of the date hereof. Agere's actual results could differ materially from the results stated or implied by such forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, completion of the distribution of Agere stock by Lucent Technologies Inc., customer demand for our products and services, control of costs and expenses, timely completion of employment reductions and other restructuring and consolidation activities, price and product competition, keeping pace with technological change, dependence on new product development, reliance on major customers and suppliers, availability of manufacturing capacity, components and materials, general industry and market conditions and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. For a further discussion of these and other risks and uncertainties, see our annual report on Form 10-K for the fiscal year ended September 30, 2001. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Nortel Networks, the Nortel Networks logo and the Globemark are trademarks of Nortel Networks. ORiNOCO is a trademark of Agere Systems.