Alcatel and MCI agree to $100 million contract for key systems to advance fiber optic network technology.

RICHARDSON, Texas--(BUSINESS WIRE)--Jan. 5, 1996--Alcatel and MCI have agreed to extend through 1998 a purchase agreement that gives MCI the opportunity to purchase a wide range of Alcatel network technologies.

Both companies value this contract in excess of $100 million. The agreement also extends an existing pricing relationship between the two companies and means that MCI will continue to purchase Alcatel 1633 SX broadband cross connects for its backbone network operations.

Cross connects perform critical bandwidth management, performance monitoring, network restoration and survivability functions in today's evolving digital synchronous optical networks (SONET). Using proprietary technologies, Alcatel works closely with customers such as MCI to create "self-healing" networks for protection against service breakdowns caused by fiber cuts and other destructive events. Broadband cross connects can manage over one million voice circuits and, typically, services with larger bandwidth requirements, such as video and multimedia.

"This is a true win-win-win situation for Alcatel, MCI and MCI's customers," said Ken Lewis, Alcatel vice president and general manager for cross connect products. "This contract extension is very valuable strategically for Alcatel and shows the importance we place on customer relationships and meeting customer needs. It also demonstrates Alcatel's leadership in the development of SONET cross connects."

"We've deployed more than 100 Alcatel cross connects nationwide over the last two years and have been impressed with the results," said Fred Briggs, MCI's chief engineering officer. "We feel that Alcatel's technology gives us a crucial competitive advantage in the continuing development of our SONET-based self-healing network."

Today's announcement marks the second major cross connect agreement between the two companies in two years. MCI and Alcatel announced the first contract in May of 1994, when MCI announced plans to upgrade network operations with a $200 million investment in cross connect technology from all vendors. MCI is increasing that investment total with this new agreement.

Separately, Alcatel has completed the delivery, installation and test of Alcatel 1631 SX wideband digital cross connects for MCImetro networks throughout the country. MCImetro is a wholly-owned subsidiary of MCI.

Alcatel Network Systems designs, manufactures and services a full line of voice, data, video and multimedia transmission products -- such as ATM switching systems, digital cross connects, fiber optic transmission systems, optical amplifiers, microwave radios, video codecs and network management systems. These products are used in high performance networks throughout the telecommunications, broadcast and utility industries. The parent company, Alcatel, is one of the world's leading communications equipment manufacturers, with plants in 32 countries and markets in over 125 countries.

MCI, headquartered in Washington, D.C., is one of the world's largest and fastest-growing diversified communications companies. With annual revenue of more than $13 billion, MCI offers consumers and businesses a broad portfolio of services including long distance, wireless, local access, paging, Internet software and access, information services, outsourcing, business software, advanced global telecommunications services, and music distribution and merchandising.

CONTACT: Alcatel

Michael Newsom, 214/996-7896

Internet: [e-mail]

or

MCI

Jim Collins, 214/918-5569