Alcatel Maintains Top Position in Intelligent Optical Hardware; 20 Percent Market Share in First Quarter 2002 According to Infonetics Research.

Business Editors & High Tech Writers

DALLAS--(BUSINESS WIRE)--May 30, 2002

Alcatel (NYSE:ALA) announced that according to international telecom market research and consulting firm Infonetics Research, Alcatel led the $1.86 billion worldwide market for terrestrial intelligent optical hardware with a 20 percent share in the first quarter of 2002. This achievement confirms Alcatel's strategy to focus on providing its customers with a smooth migration from existing to future services and revenues. Key to this smooth migration is the ability of Alcatel's data aware products to support today's dominant SONET/SDH-based services while facilitating the incremental deployment of enhanced data services.

Infonetics Research defines Intelligent optical hardware as data aware equipment with remote configuration and remote service provisioning that can be deployed in mesh, star, and ring, allowing carriers to build out and revamp optical networks quickly.

From an early stage, Alcatel understood that network intelligence would play a key role for service providers. Network intelligence helps operators to enhance the flexibility of their networks, to reduce their operating expenditures and to differentiate their services from those of competitors. One class of Alcatel products in particular, the optical cross-connect, plays an instrumental role in bringing network intelligence into today's optical networks. The optical cross-connect manages the interconnection of multiple transmission links in a large central office, ensuring that each link is used to its maximum potential. This improves network efficiency, increases overall reliability and lowers infrastructure costs.

"Alcatel gained significant market share each quarter of 2001, reaching number one in the fourth quarter in the overall category of terrestrial intelligent optical hardware, doubling their market share during the year. Alcatel maintained number-one ranking in first quarter 2002 with 20 percent share as measured in terms of revenue for products shipped in the quarter. This means that Alcatel is well positioned to take advantage of the build-out of optical networks in the future," said Michael Howard, Infonetics Research's principal analyst and co-founder.

"The Infonetics Research report shows that Alcatel leads the market for optical products supporting the transition to next-generation networks, those systems which are at the heart of operators' strategies in this difficult environment," said Christian Reinaudo, president of Alcatel's optics activities. "Our focus on network cost optimization, our leadership in cross-connects and network intelligence, and our leading offering in metro systems are the foundations for this achievement."

About Infonetics Research

Infonetics Research (www.infonetics.com) is a market research and consulting firm covering the networking and telecommunications industries, and has been recognized as a leading expert in the VPN space since publishing the industry's definitive early analysis on the subject in 1997. Infonetics Research provides worldwide market share services and U.S. and European demand-side research to network equipment and software manufacturers, service providers, chip and component manufacturers, and the investment community worldwide.

About Alcatel

According to leading telecom market research firm RHK, Alcatel was the 2001 world leader in global optical transport -- encompassing terrestrial and submarine applications -- with 17 percent market share, in terrestrial optical transport with 14.2 percent market share and in submarine optical transport with 41 percent market share, an unprecedented achievement in the telecom industry. Alcatel's optics business comprises optical components, optical fibers, SDH/SONET and DWDM systems, cross-connects, microwave radio links, network intelligence, and services for both terrestrial and submarine applications.

Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer, anywhere in the world. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of Euro 25 billion in 2001 and 99,000 employees, Alcatel operates in more than 130 countries. For more information, http://www.alcatel.com.