Alcatel Announces New Generation SPEED TOUCH USB -- ADSL Modem; User-friendly, Eye-catching Modem Targeted to Meet Growing Consumer Market Demand for Fast Internet Access.

ATLANTA--(BUSINESS WIRE)--June 8, 1999--

Alcatel (NYSE:ALA), the world's leading ADSL (Asymmetric Digital Subscriber Line) vendor(1), has announced the introduction of its SPEED TOUCH(TM) USB ADSL modem -- part of its SPEED TOUCH(TM) portfolio of ADSL products launched at CeBIT 99.

The new generation of Alcatel SPEED TOUCH USB, with its revolutionary design, is targeted at both the residential and the professional PC user. Since the USB (Universal Serial Bus) port is a popular and widespread interface to the PC., the SPEED TOUCH USB is notable for its simplicity of connection to the Internet via ADSL. This makes Alcatel's new product an ideal high-speed Internet connection solution for laptops and stand-alone PCs.

With traditional modem technologies approaching their capacity limits and Internet applications demanding ever-increasing access speeds, the Alcatel SPEED TOUCH ADSL modem family was designed to overcome all such limitations. The SPEED TOUCH USB offers a cost-effective entry level solution for fast Internet access, thanks to its innovative design, small footprint, and plug and play functionality. In addition, because it is USB bus-powered an external power supply is not needed. For this Alcatel designed a special single chip handling both ADSL and USB functions. The SPEED TOUCH USB will be released in both ANSI T1.413 iss2 and in G.Lite variant.

"Easy installation and plug and play operation are two of the key requirements that the aftermarket ADSL modems will need to meet in order for the market adoption to accelerate. End user DSL technologies need to look at the analog modems' ease of use as a goal," said Dataquest analyst Jouni Forsman.

Alcatel ADSL SPEED TOUCH devices -- modems and routers -- offer data rates up to 200 times faster than a conventional 33.6 Kbps modem, delivering up to 8 Mbps downstream from the Internet to the desktop computer and 640 Kbps upstream, while simultaneously maintaining a conventional voice telephony line.

Martin De Prycker, President of Alcatel's new Internet Access Division, commented, "Demand for fast Internet access enabled by ADSL continues to grow at a remarkable rate, particularly in the U.S. where ordinary consumers are becoming used to high-bandwidth Internet applications, such as high-quality video and audio streaming. Alcatel's SPEED TOUCH USB is ideally suited to the needs of a retail market, just as incumbent telecommunications operators and ISPs alike are rapidly rolling out their commercial ADSL offerings."

The SPEED TOUCH USB modem will be available October 1999.

(1) Ryan Hankin Kent, a leading US-based telecommunications market research firm, January 1999.

Alcatel builds next generation networks, delivering integrated end-to-end voice and data solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 21.3 billion ($25.0 billion), Alcatel operates in more than 130 countries. For more information, visit Alcatel at http://www.alcatel.com or the US Web site at www.usa.alcatel.com. Contact for Alcatel Investor Relations, (US) Michael Haase, 972/519-6855, [e-mail].

ADSL (Asymmetric Digital Subscriber Line) transforms an operator's existing copper twisted-pair investment into a multimedia broadband distribution system. ADSL systems enable the existing copper pair to carry several megabytes' data plus a separate, simultaneous voice line. Telecommunications operators are rolling out ADSL to offer a low-priced broadband service, in competition with providers such as the cable industry and its cable modems. Broadband services are targeted by ADSL, since broadband increases the revenue per line and per customer.

Operators and service providers have the choice of offering a wide range of services to subscribers connected to a single type of ADSL DSLAM (Digital Subscriber Line Access Multiplexer) ranging from very high to medium bit-rates.

An active contributor to the various standards bodies creating ADSL standards, Alcatel continues to work to ensure mass-market availability of high-speed Internet access based on a single, standardised ADSL technology.