Alcatel Reorganizes Its Telecom Sector.

PARIS--(BUSINESS WIRE)--Nov. 4, 1998--To better integrate the fast and profound evolution of its markets, and while taking note of the recent stock market crisis, Alcatel is changing the organization of its Telecom sector.

Commenting on this new organization to the employees, Serge Tchuruk stated: "It is an important step towards better customer service and meeting our shareholder expectations. There are three aspects to focus on: an organization structured by markets, a closer supervision at the top of the company and management control in real-time which integrates short term perspectives."

A new organization by market segments is being put in place:

-- for the full network operator market, the Networking Business

Group will comprise switching and mobile infrastructure, as well

as network services. The latter will soon form a new Division,

offering software as well as network management services

including facility management;

-- for the information highway market, the Access and Transport

Business Group will comprise transmission, access, submarine

networks and space activities. Its focus towards Internet

technologies will be accelerated;

-- for the private networks and consumer market, the Enterprise and

Consumer Business Group will comprise voice and data enterprise

networks, which will be integrated, as well as GSM and Internet

terminals.

The implementation of these Business Groups is being completed by the creation or strengthening of three central functions:

-- the Network Strategy function will ensure the coherence of the

major technological choices within a homogeneous network

structure;

-- the Marketing and Business Development function will be

strengthened at the central level, as well as within all the

units of the Telecom sector;

-- the Project Management function will develop Alcatel's capacity

to offer turnkey solutions and to manage complex projects.

The role of the Executive Committee as the decision making body is being strengthened. The six members of the Executive Committee will share globally the responsibility of the Telecom sector's ten global profit centers, seven geographical areas and six central functions. In line with the Group's focus on telecom, S. Tchuruk will lead this team.

As soon as mid-1999, the Group will publish quarterly results. The information flows between the operational units and the Group's general management are being accelerated in order to allow better anticipation of the results.

Within this organization, the following appointments are announced:

Within the Executive Committee:

-- Krish Prabhu, CEO of Alcatel USA, is appointed Senior Executive

Vice President of Alcatel Telecom;

-- Olivier Houssin joins the Committee as Executive Vice President

in charge of the Enterprise and Consumer Business Group; the

Executive Committee will now comprise S. Tchuruk, J. Cornu, J-P.

Halbron, K. Prabhu, J. Dunogue and O. Houssin.

In addition, several new or recent appointments are announced within the Telecom sector:

-- Franck Imbert as Financial Controls Director,

-- Alan Mottram as President of the Access Division,

-- Jean-Paul Barth as General Manager of Alcatel CIT,

-- Martin de Prycker in the newly created position of Network

Strategy Director.

Biographies

Krish Prabhu, 43, has PhD and MS Degrees in Electrical Engineering from the University of Pittsburgh, and an MS Degree in Physics from the Indian Institute of Technology, Bombay, India. He began his career at AT&T Bell Laboratories in Holmdel, NJ, where he worked in several areas related to Fiber Optics and Broadband technologies. He joined Alcatel in the United States in 1984 and became President of Alcatel's Broadband Division in 1996. In 1997, Krish Prabhu, Executive Vice President of Alcatel and member of the Executive Committee, became Chief Executive Officer of Alcatel Network Systems, Inc., the U.S. telecom subsidiary of Alcatel. He is responsible for the transmission, access and submarine network worldwide activities of Alcatel Telecom. In September 1998, he was appointed President and CEO of Alcatel USA.

Olivier Houssin, 45, graduated from the Ecole Polytechnique and Telecommunications Engineer, started his career in Thomson-CGR, where he had responsibilities in Italy and in the U.S. In 1988, he became Vice-President operations in Thomson Consumer Electronic, then Executive Vice President in 1991. In 1993, he joined Alcatel to be President of Cables activities in the North America. In 1996 he became President, Telecom Products Division, Cable and Components sector of Alcatel.

Franck Imbert, 47, graduated from ESSEC, joined Alcatel in 1979. He has held the position of Financial Controller for several sectors of the Group including Batteries, Engineering and Systems and Cables and Components. He is now Financial Controls Director of the Telecom Sector of Alcatel.

Alan Mottram, 38, is a graduate in law and has been with Alcatel since 1991. Before joining Alcatel, he held a number of senior positions within GEC and GPT/Siemens in the UK in sales/marketing, business development, project and operations management. He worked from 1991 in developing Alcatel's business in the UK and, until becoming Alcatel's Access Division President in October 1998, he managed Alcatel's Intelligent Network Business Unit from 1995.

Jean-Paul Barth, 56, has a degree in Economics and is a senior accountant. He started his career with Rhone-Poulenc, where he held several responsibilities before becoming Deputy General Manager of Rhone-Poulenc Chimie. He was then appointed General Administration Director of Orkem and vice president of Norsolor. He joined Total in 1990 as President of the General Administration and President of Total's subsidiary Hutchinson. In January 1996, he joined Alcatel as CEO of General Occidentale and Director of the General Administration, positions which he will retain along with his Alcatel CIT responsibilities.

Martin de Prycker, 43, joined Alcatel in 1982 after obtaining degrees in electrical engineering, computer science and business management. He held various responsibilities within the Group's Research Division. In 1984, he was appointed Research Director of Alcatel in Antwerp. In 1996, he became vice president of the Access Division, responsible for Internet and ADSL.