Alcatel's Integration Expertise Powers Microwave Radio Network for Newfoundland and Labrador Hydro.

Business Editors/High-Tech Writers

OTTAWA--(BUSINESS WIRE)--May 7, 2003

Alcatel (NYSE:ALA) has been awarded a $10 million contract by Newfoundland and Labrador Hydro for the East-West Coast Interconnect Project, the final phase of the deployment of a digital microwave radio network providing advanced communications services for the Canadian utility company. Last year, Alcatel announced the completion of the first phase of this deployment covering the East coast of the Canadian province.

The new infrastructure improves the reliability of Newfoundland and Labrador Hydro's power system by transferring mission critical line protection circuits from the public telephone system to the utility company's own microwave system.

The East-West Coast Interconnect Project will complete a province-wide network rollout of high speed data and voice links between the utility company's Energy Control Center, generating stations and remote locations monitoring power delivery to customers. Alcatel provided equipment and integration services across all phases of the utility company's network upgrade and expansion.

"Province-wide telecommunications network monitoring of our transmission system will result in more reliable energy supply for our customers, due to fewer network disturbances and shorter outage durations," said Bill Wells, president and CEO, Newfoundland and Labrador Hydro. "Newfoundland and Labrador Hydro selected Alcatel for all phases of this project because its integration skills and expertise ensured a seamless deployment."

Alcatel provided end-to-end networking expertise throughout all phases of network upgrade, including network planning and design, site construction, equipment installation and testing, and customer training. As a multi-vendor solution, the East-West Coast Interconnect Project integrates the Alcatel Microwave Digital Radio (MDR)-8000, the Alcatel 1603 SONET multiplexer products along with third party equipment.

"Utility companies require reliable carrier-class communications networks tailored to support specific mission critical business applications," said Frederic Rose, president of Alcatel's integration and services activities. "Delivering a turnkey solution for Newfoundland and Labrador Hydro, Alcatel assumed complete responsibility for the project enabling the utility company to focus on providing services for its customers."

About Newfoundland and Labrador Hydro

Newfoundland and Labrador Hydro generates, transmits and distributes electrical power and energy to utility, residential and industrial customers throughout the province. Their power generating assets include eight hydraulic plants, one oil-fired plant, four gas turbines and 29 diesel plants. Each year, the Hydro Group generates more than 80 percent of the energy consumed within the province. With a workforce of about 816 employees, the corporation directly serves several large industrial customers in the province and more than 35,000 residential and commercial customers in rural Newfoundland and Labrador. Hydro also sells energy to an investor-owned utility that distributes electrical power to the balance of the province's population.

About Alcatel

Alcatel provides end-to-end communications solutions, enabling carriers, service providers and enterprises to deliver content to any type of user, anywhere in the world. Leveraging its long-term leadership in telecommunications network equipment as well as its expertise in applications and network services, Alcatel enables its customers to focus on optimizing their service offerings and revenue streams. With sales of Euro 16.5 billion in 2002, Alcatel operates in more than 130 countries. For more information, http://www.alcatel.com.

About Alcatel's Integration and Services activities

To meet today's increasing demand for customized turnkey network solutions, Alcatel's services range from business and technology consulting, network design -- integrating Alcatel and third party equipment including operation support systems -- implementation management up to technical network operation and maintenance services. Having successfully built Europe's and Latin America's largest optical backbones, deployed and integrated over 10,000 sites for major mobile networks in Europe, Asia and Latin America, and operating major networks world-wide, Alcatel's services expertise serves all telecom carrier segments as well as the telecom requirements of non-carriers like oil and gas, transport and utility companies.