Alcatel Delivers China's First GPRS Trial Network to China Mobile.

Business Editors

PARIS--(BUSINESS WIRE)--Aug. 1, 2000

Advancing China's Migration to Third Generation Communications

Alcatel (NYSE: ALA), the world leader in broadband network solutions, has delivered China's first WAP over GPRS trial network to China Mobile Communications Corporation (CMCC), the biggest mobile operator in China, setting a milestone in China's migration to third generation communications.

The GPRS trial network was installed in Hangzhou, the capital city of Zhejiang Province, for Zhejiang Mobile Communications Co. Ltd. (ZMCC), the Zhejiang provincial subsidiary of CMCC. ZMCC recently approved the GPRS trial network and will commence commercial trial.

As an integral part of CMCC's plan to make GSM "data ready", this trial network in Hangzhou is one of the six WAP over GPRS trial network projects authorized by the mobile operator to six different suppliers in China.

"We are very pleased to own the first completed and officially approved GPRS/WAP trial network in China, built with the help of Alcatel. We are confident that ZMCC will be the first operator to provide WAP over GPRS services to customers in China," said Hu Songling, Deputy General Manager of ZMCC.

Hu Songling is very optimistic about the GPRS service market in China. "Today, few people in China access the Internet via GSM because it is far from being reliable, efficient and cost-effective for mobile Internet users. But WAP over GPRS will change the situation significantly by offering high speed - close to ISDN fixed line speed for data; high reliability - always on line; and cost-effectiveness - only the volume of data transmitted is chargeable," he explained.

China is one of the fastest growing GSM markets in the world. Market studies show that about 10 to 20 percent of all mobile subscribers will use data services by 2002. Considering that China adds 15 to 20 million new mobile subscribers every year and taking into account the tremendous growth of Internet users, China is expected to have three to five million mobile data users within the next three years.

The trial network project was implemented by Shanghai Bell Alcatel Mobile Communications Co. Ltd. (SBAMC), a joint venture between Shanghai Bell and Alcatel. Tarek Moustafa, President of SBAMC said, "China Mobile has made a right decision to position itself for tomorrow. With the completion of this GPRS trial network, both Alcatel and CMCC have made a firm step towards 3G."

"Alcatel is proud to be the frontrunner in providing mobile solutions for China's migration to 3G. Our GSM 900/1800 mobile solutions already installed in the sites of our customers can also support GPRS and EDGE. The competitive characteristics of our solutions offer investment protection for our customers, allowing them to easily and cost-effectively migrate to GPRS deployment."

The implementation of GPRS in China will lead to the development of a new range of cost-effective Internet-based services and applications such as mobile office, Internet and intranet access, e-commerce and telemetry.

Alcatel's GPRS pilot and commercial networks have been rolled out successfully by operators worldwide. Alcatel's GPRS solution is ready to evolve safely towards 3G: EDGE and UMTS to protect the investment of operators.

Alcatel's state-of-the-art EVOLIUM(TM) mobile solutions for GSM networks enclose all the necessary radio, switching and routing infrastructure elements. They have been designed to integrate third-generation mobile technologies. Capitalizing on its own GSM and ATM/IP expertise and now benefiting from Fujitsu's strong experience with NTT DoCoMo in the development of UMTS, Alcatel will have a timely first 3G offering (UMTS - R'99) ready for deployment by first half 2001.

About Alcatel

Alcatel builds next generation networks, delivering integrated end-to-end voice and data communications solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 23 billion, Alcatel operates in more than 130 countries.

Alcatel came to China in 1984. It applies a "three step" strategy which is technology transfer to China at the beginning, then establishing R&D in China for China, and finally R&D in China for its worldwide market. Alcatel has now 5000 staff in China with 16 joint ventures, 6 wholly owned enterprises and more than 10 provincial representative offices. SBAMC, an 800-strong joint venture between Alcatel and Shanghai Bell, focuses on the production and engineering services of complete GSM and DSC 1800 mobile networks in China. Shanghai Bell is a joint venture between Alcatel and the Ministry of Information Industry.

For more information, visit Alcatel on the Internet (www.alcatel.com).

Note to the Editors

General Packet Radio Service (GPRS) provides end to end packet-switched mobile internet service at a user rate of up to 115-kbit/s, i.e. 10 times the rate currently offered by GSM. Alcatel's GPRS solution - designed to operate in a multi-vendor environment - can be implemented in any GSM network. To enable smooth deployment of GPRS, Alcatel has designed a flexible, scalable, and cost-effective solution. Alcatel's Evolium radio solution for GSM networks have fully compatible hardware to smoothly introduce GPRS services through a simple software upgrade without any site visit. GPRS-specific network elements will be located at each mobile switching site, while new mobile handsets will be necessary to benefit from the advanced services.

Alcatel's GPRS core network, scalable to the operator traffic growth is part of Alcatel's Mobile core solutions which offer a full turn-key solution including HLR/AuC, Charging Gateway and the Operation and Maintenance Center-GPRS (OMC-G).