Alcatel Takes Majority in CTC, a Specialist in Submarine Cable Installation; Alcatel Reinforces Its Marine Capacity in Order to Offer Better Marine Services.

Business Editors, High-Tech Writers

PARIS--(BUSINESS WIRE)--July 20, 2000

Alcatel (NYSE:ALA), the world leader in optical networking, has taken a majority share holding in CTC marine project, a British specialist contractor in the field of submarine cable installation.

With 74% of the share capital, Alcatel takes a further step in anticipating the increasing needs of telecommunications services providers. This represents another significant move by Alcatel in the development of its strategy to forge lasting strategic partnerships with vessel and cable installation experts.

Alcatel and CTC have a successful history of co-operation on demanding submarine cable projects with CTC, having laid and buried cables for a number of systems on behalf of Alcatel. These include burial operations on the SMW3 system, the largest inter-regional cable system built to date, linking South East Asia with Europe; and Southern Cross, a high capacity South Pacific system connecting Australia, New Zealand, Fiji and Hawaii with the US west coast.

Driven by the soaring demand for transmission capacity for internet-based services, Alcatel plans to lay more than 100,000 cable-kilometers per year in all the world's oceans over the forthcoming years to complete its customers' projects. This new alliance with CTC, which follows the recent announcement of a joint venture with Louis Dreyfus Armateurs for vessel ownership and ship and cable installation management, will help Alcatel to secure for its clients the delivery of their networks on time, everywhere, thanks to state of the art cable vessels, the best crews and highly specialized cable installation machinery. Alcatel believes that these capabilities are key to offering networks that meet the demanding service delivery needs of the new generation of operators. Such an alliance will strengthen Alcatel's ability to provide its customers the best level of security for their networks.

In October, CTC will introduce its first dedicated cable installation vessel, placed on a one year contract to Alcatel. In addition to its range of installation and burial services, CTC has a comprehensive geotechnical capability which includes route survey, burial assessment, modeling for rock cutting and trenching performance prediction.

"Direct involvement in a company such as CTC proves Alcatel's willingness to better control its resources in marine activities in order to enhance its ability to deliver class-leading cable protection and secure program implementation to its submarine system customers," said Christian Reinaudo, President of Alcatel's Optics Group. "We have chosen a partner we have known for a long time, which has proved its skill and expertise in the fields of seafloor engineering and cable installation. This strategic partnership ensures that our customers benefit from a full turnkey service, including cable installation in all its dimensions."

For CTC the shareholding agreement with Alcatel provides the investment and technical environment to support the technology development and expansion programs planned for the next 2-3 years. Charles Tompkins, Managing Director of CTC, pointed out, "The highly successful and productive relationship already established between CTC and Alcatel, makes this partnership an ideal arrangement for both parties. While Alcatel will support CTC's expansion and development, CTC will be able to provide Alcatel with the most technically advanced cable installation and protection solutions available to the submarine cable market."

About Alcatel

In November 1999, RHK, a leading telecommunications analyst firm, said that Alcatel holds a 21% share -- the number one position -- of the world's total transport market, which comprises submarine and terrestrial transmission systems. RHK noted that Alcatel's market-leading 37% market share in the submarine networks segment helped secure the top position in the total transport market. In addition, RHK found that Alcatel commands a 37% share of the digital cross-connect systems (DCS) segment. Cross-connect systems contain the enabling technology for operators to offer high bandwidth services. Alcatel is also cited as the global leader in terms of DWDM market share for the global market encompassing both terrestrial and submarine applications.

Alcatel is the world leader in delivering full turnkey submarine network solutions and services. Alcatel leads this industry in terms of:

-- having the highest sold capacity up to 5.12Tbit/s for the

long-haul systems and 3.6Tbit/s for the short-haul ones, using

the latest DWDM technology;

-- having the largest manufacturing capacity at 85,000 km per

year strategically located around the Globe;

-- using 9 dedicated purposed-designed vessels for a tight

control on the delivery schedule.

Current contracts, worth US$ 4.5+ billion, include the most advanced undersea networks in the world today: Atlantica-1 and FLAG Atlantic-1 systems in the Atlantic, the FLAG Pacific-1, Japan-US and Southern Cross transpacific systems, and the MAC and MAYA-1 systems in the Americas and the SAT-3 around Africa.

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. For more information, visit Alcatel on the Internet: http://www.alcatel.com

About CTC

CTC entered the submarine cable industry in 1996 with the primary objective of bringing a science based approach, developed in the technically demanding pipeline burial market, to the submarine cable industry. Since then CTC has introduced a range of state of the art installation and trenching equipment which has consistently set new standards in cable protection. This equipment includes:

-- C-Trencher 1 -- introduced in 1998. A heavy weight, high

productivity, ROV based, jet trenching system able to bury

cables to a depth of 1.5m in water depths of 2500m

-- C-Trencher 2 -- introduced in 1999. A development of

C-Trencher 1 but with the addition of a track base. The system

is offered as part of a complete spread with the dynamically

positioned support vessel 'Ocean Commander' and can bury cable

to 2m in water depths of 3000m. The spread is operational up

to sea state 7.

-- CTC Rockplough(c) -- introduced in 1999. An industry unique

plough able to bury cable very deeply in a comprehensive range

of seabed conditions, including weathered rock.

CTC provides a comprehensive cable installation service from route analysis (offered in conjunction with SAGE Engineering) through to post lay burial. Advanced seafloor engineering means that CTC is able to continuously innovate and ensure that customers receive the most productive, efficient and cost effective solutions for cable installations worldwide. Sales in 1999 were US$25m, a figure which is set to more than double (to US$55m) in 2000 as a result of the investment and development program currently being implemented. CTC intends to be the world leader in cable burial and protection, probably the most critical feature of the installation of the new generation very high capacity cables.

CTC is recognized worldwide as a pioneer in the application of advanced and specialist technology aimed at improving the reliability and productivity of installation operations and significantly enhancing cable protection. CTC owns and operates state-of-the-art vehicles and equipment for cable installation including two heavy weight, deep burial trenching spreads, a unique Rockplough(c) designed to bury and protect cable in a comprehensive range of seabed conditions and a range of modular deck equipment. CTC's first cable installation vessel, a fully equipped, 4000T, purpose designed cableship, is based on the highly successful UT745 design. The vessel features a number of technical innovations such as self fleeting drum tensioners, enabling full competency in both installation and maintenance roles, and an integrated control and navigation system allowing for lower manning and improved reliability. It has an exceptionally high bollard pull which gives it the ability to support a CTC Rockplough(c), providing the highest level of ploughed cable protection available in the market.

CTC has an active program of contracted work including the installation of the Manx cable for British Telecom, FLAG Atlantic (high capacity trans-Atlantic network), Pangea (Northern Europe) and Tiger (Hong Kong to Japan) and two major post lay burial contracts -- SAC (South America) and Southern Cross (South Pacific).