Alcatel Outlines Plans for Accelerated Growth in Global Telecom Market.

Business & Technology Editors

SUPERCOMM 2000

ATLANTA--(BUSINESS WIRE)--June 6, 2000

Completed $7 billion Newbridge acquisition adds new people, new

products and new market opportunities to a rapidly

intensifying US onslaught

At the SUPERCOMM 2000 trade show today, Alcatel outlined plans for accelerated growth in the US market, following the completion of its acquisition of Newbridge Networks on May 25th.

Alcatel's worldwide lead in broadband networking will be key to its US growth strategy. Alcatel commands the No.1 global market position in ADSL (Asymmetric Digital Subscriber Line) technology with a 56% share. The DSL market is growing explosively, and Alcatel now estimates that it will ship 6 million DSL lines this calendar year, depending on market conditions, up from initial estimates of 3 million.

Industry analysts concur that as a result of the Newbridge acquisition, which capped $16 billion in acquisitions in the North American market over the last two years, Alcatel also holds the No.1 global market share in Fixed Wireless Broadband access, or LMDS (Local Multipoint Distribution System), with an estimated market share of about 40%. The acquisition of Newbridge also puts Alcatel at either No.1 or No.2 in multi-protocol broadband switching on a country by country basis.

"Our first priority is to further grow Alcatel's market share in broadband access - where we already have at least twice the share of our nearest rivals," says Krish Prabhu, COO of Alcatel worldwide and CEO of Alcatel Americas." And, we intend to recapture the worldwide No.1 market share in multi-protocol switching based on ATM/MPLS technologies." Prabhu added that "Alcatel will also aggressively target a top three position within the next major battleground of optical Terabit routing."

"I'm predicting that everyone will quickly come to regard broadband internet as a birthright. In the US it will be right up there with air-conditioning and apple pie," said Pearse Flynn, newly appointed President of Alcatel's Carrier Networking Group. "I have only one goal, and that is to ensure that Alcatel equipment captures, aggregates and switches the lion's share of the world's broadband traffic."

Commenting on the successful rapid integration of Newbridge into Alcatel CID, Prabhu said, "we believe that we will set the performance bench mark for an integration of this size and type, while capitalizing on the momentum that both Alcatel and Newbridge have generated in the US."

Since the deal closed ten days ago, major parts of the integration that have already been implemented include:

1) By the end of June 2000, the Newbridge sales force will be

integrated into the Alcatel worldwide key account structure.

2) The rationalization of the broadband product portfolio. At the

show today, Alcatel is demonstrating the integration of the

portfolio under a single network management umbrella.

3) An aggressive sales program presenting the benefits of the new

product line to local and national service providers,

cross-leveraging both companies' existing customer bases, is

already under way.

4) A high profile North American advertising campaign in print,

on-line and broadcast media to create awareness of the Alcatel

brand and its values.

Revenue contributions at Alcatel from US markets have skyrocketed from $350 Million in 1995 to approximately $4.5 Billion in 1999, which represents more than 20% of Alcatel's total revenue. Newbridge Networks, in turn, derived 38% of sales from US markets in fiscal 2000 and, more importantly, measured sequential revenue growth in its last two fiscal quarters at more than 50%. With the successful integration of Newbridge, Alcatel is redoubling its efforts in the critical US market as part of its strategy to become one of the world's top three networking companies.

About Alcatel

Alcatel builds next generation networks, delivering integrated end-to-end voice and data networking solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 23 billion in 1999, Alcatel operates in more than 130 countries.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward looking statements relating to the Company's expectations for sales growth in certain product lines and increase in market share beginning in 2000 and going forward. Such expectations assume that (i) current market trends, particularly in the U.S., will not change; (ii) customer spending patterns will not slow down; (iii) product deliveries will not be adversely affected by supply shortages; and (iv) the integration of Newbridge will proceed smoothly. Actual results could differ materially from the above as a result of these or other factors.