Alcatel to Expand Broadband Access in China's Zhejiang Province; 100,000 DSL Line Extension Program to Help Telco Target New Customer Segments.

Business Editors & High Tech Writers

DALLAS--(BUSINESS WIRE)--May 13, 2002

Alcatel (NYSE:ALA), the world leader in broadband access, today announced it has won a significant contract in China's Zhejiang Province through Shanghai Bell, Alcatel's joint venture in that country.

Under the agreement, Alcatel will provide Zhejiang Telecom, a subsidiary of China Telecom, with 80,000 digital subscriber lines (DSL) in support of the service provider's latest broadband access network expansion. In total, more than 100,000 lines will be added to Zhejiang's network during the current extension, which will cover all major cities in the province including Hangzhou and Ningbo. Since Alcatel entered into a strategic agreement with China Telecom to deliver broadband access throughout the country in March 2001, more than 400,000 subscribers have signed up for DSL services.

"Asymmetric DSL is the perfect fit for China's rapidly-growing broadband access market," said Wei Leping, chief engineer of China Telecom. "With the development of IP-based broadband applications, we believe that ADSL will become the country's most widely deployed broadband access technology."

China Telecom and Alcatel are jointly conducting a Fast Forward program, to enable China Telecom to provide services that address the different needs of new customer segments. Alcatel's Fast Forward consultative program is designed for carriers looking to improve their service profitability. Tailored according to the individual needs of the service provider, the program's main objective is to achieve greater and faster profitability by fine-tuning operations and continuing development of service packages that target both residential and business markets.

"Alcatel is keen to help our carrier customers benefit from our worldwide experience in developing and marketing profitable broadband services," said Michel Rahier, president of Alcatel's broadband networking activities. "We welcome the opportunity to not only physically extend Zhejiang's DSL network, but also to help China Telecom and its partners to understand and service the broadband market."

Zhejiang Telecom will use the Alcatel 7300 Advanced Services Access Manager (ASAM), the world's most widely deployed broadband network access platform.

The Alcatel 7300 ASAM is the centerpiece of a solution that enables carriers to offer high-speed Internet access as well as a range of integrated data, voice and video services. Specifically, the Alcatel 7300 ASAM paves the way for delivering premium broadband entertainment services such as streaming video, music download and interactive gaming.

According to industry analysts the Dell'Oro Group, with a 38.2 percent share of cumulative port shipments to the end of 2001, Alcatel's DSL market share is more than three times that of its nearest competitor.

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.

Alcatel came to China in 1983. Its heavy investment in China has now brought forth 17 joint venture and wholly owned companies, and six research and development centers, covering the full scope of activities spanning the air, the land and the sea. It is also the supplier of all major China telecom operators.