Alcatel Telecom to supply end-to-end ADSL system to four Bell operating companies for high-speed Internet access.

RICHARDSON, Texas--(BUSINESS WIRE)--October 7, 1996--

ADSL to deliver low-cost, exciting new applications for Internet and

other on-line services using existing telephone networks

Alcatel Telecom today announced that it has been selected by the Joint Procurement Consortium -- formed by Ameritech, BellSouth, Pacific Bell, and SBC Communications -- as the supplier to connect thousands of subscribers with end-to-end asymmetric digital subscriber line (ADSL) equipment, pending successful contract negotiations.

Each of the Consortium's members has its own plans to deliver high-speed access to the Internet and other on-line services using existing, twisted-pair telephone infrastructure -- currently reaching 99 percent of all U.S. homes -- at a rate up to 200 times faster than traditional modems. The Consortium foresees this technology serving thousands of customers in the next year to 18 months and reaching more than a million customers by 2001. Alcatel and each of the four companies expect to conclude contract talks by year's end.

"The Consortium has given Alcatel a tremendous opportunity and we're pleased to work with them on this important project," said David Orr, president of Alcatel Telecom, NAFTA Area. "Alcatel focuses on ways for our customers to increase the value of their networks and the development of our ADSL solution exemplifies that way of thinking."

The announcement signals acceptance of Alcatel Telecom's end-to-end ADSL solution using asynchronous transfer mode (ATM) and discrete multitone (DMT) technologies. The American National Standards Institute has selected DMT as the ADSL line modulation standard. Alcatel's ADSL/ATM system dramatically increases the speed and capacity of data delivery over today's telephone networks.

"Based on the best combination of cost, performance and availability, the Consortium selected the Alcatel 1000 ADSL system to offer exciting new subscriber services over current telephone line technology," said Todd Poston, Director of ADSL and Carrier Product Management. "Using our global technology resources, Alcatel delivered a high level of component and systems integration in response to this proposal. This deployment will go a long way toward making ADSL-based services via ATM delivery an extremely attractive service for the end user."

Alcatel's open, standards-based ADSL product line better utilizes the capacity of standard twisted pair copper telephone lines and enables service providers to deploy new services quickly while maximizing their existing networks. With Alcatel's ADSL approach, service providers can introduce high-speed multimedia services on a per-user basis without costly network system upgrades or expensive in-home equipment.

Alcatel's ADSL solution offers both speed and power adaptations, another combination unique to the industry. DMT technology enables the ATM transfer rate to automatically adjust its speed due to varying line conditions and external interference. In addition to flexibility and bandwidth allocation, Alcatel's DMT modem reduces power in the presence of interference from adjacent wires or other sources -- a key advantage for operators as it ensures that the introduction of ADSL will not degrade existing services or vice versa. Operators also can program the speed at which the modem operates in order to provide a fixed-rate service. In all cases, the system is able to determine and run at the highest achievable rate and report any line impairments.

Alcatel's 1000 ADSL solution has been deployed for separate trials with carriers in Europe and the United States. The 1000 ADSL represents one element of Alcatel's Full Service Network (FSN) product portfolio, which includes fiber-to-the-home, fiber-to-the-curb, ATM switching, synchronous optical network transport and network management systems. As part of the FSN strategy, Alcatel is offering all the necessary subscriber and backbone ATM switching and ADSL delivery equipment as a complete package. Consortium negotiations do not include ATM switching equipment.

Alcatel Telecom activities in North America include the design, manufacture and service of a full line of voice, data, video and multimedia telecommunications products -- such as ATM switching systems, digital cross connects, fiber optic transmission systems, optical amplifiers, microwave radios, wireless communications switches, video codecs, and network management systems. The telecommunications and broadcast industries, private operators and corporations use these products to create high performance networks. The global operations of Alcatel Telecom make it one of the world's leading communications equipment manufacturers. Alcatel Telecom is part of the Alcatel Alsthom group, which maintains its headquarters in Paris. Alcatel Alsthom trades on the New York Stock Exchange as ALA.

CONTACT: Alcatel Telecom

Michael Newsom, [phone]

[e-mail]

or

Edelman Public Relations 

Dan Guitteau, [phone]

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