Alcatel Wins $76 Million GSM Expansion Contract in China's Zhejiang Province.

Business Editors

DALLAS--(BUSINESS WIRE)--March 11, 2002

Alcatel (NYSE: ALA), through its Chinese joint-venture Shanghai Bell Alcatel Mobile Communication System Co. (SBAMC), has signed a GSM network expansion contract with Zhejiang Mobile Communication Co. (Zhejiang MCC). This network expansion will bring Zhejiang GSM network to a total capacity of 16 million subscribers. Estimated value of the contract is $76 million.

Under the contract, Alcatel will deliver and install its Evolium mobile infrastructure (base stations, base station controller, mobile switching center and home location recorder) and software in seven cities and regions of the Zhejiang province in the first half of 2002. Alcatel's infrastructure products, which already have been supplied to 18 provinces in China, will be manufactured by SBAMC. The software will enable seamless roaming between GSM and DCS 1800 technologies.

Zhejiang Province, located in the eastern coast and with a population of 46 million, is one of China's most developed provinces.

"Our cooperation with Zhejiang MCC dates back to 1993, when Alcatel built Asia's first GSM mobile network trial in the city of Jia Xin. This eighth expansion contract confirms once again the long-term trust from our strategic partner Zheziang MCC," said Chen Lixin, president of SBAMC.

"We are very pleased to continue our cooperation with Alcatel. A good partner is the guarantee for building a high-quality network to meet the ever-growing demand of mobile subscribers in Zhejiang," said Xu Long, general manager of Zhejiang MCC.

In a significant market shift, Alcatel is now the world's fastest-growing GSM/GPRS supplier. Currently, more than 110 mobile operators worldwide rely on Alcatel's Evolium GSM/GPRS core network and radio solutions. Alcatel's UMTS solutions are a reality today, with 15 pre-commercial UMTS networks already installed worldwide, and another 10 to be delivered by mid-2002. Alcatel's strategy covers all aspects of UMTS deployment, from radio access and core network up to applications and terminals. In particular, Alcatel's Evolium SAS capitalizes on Japanese 3G technical and field experience, and delivers a field-proven 3GPP-compliant UMTS radio infrastructure.

About Alcatel

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, www.alcatel.com