DSL Meets The TV; Thomson and Alcatel Jointly Demonstrate Enabling Technologies for Broadband DSL Entertainment.

Business Editors & High Tech Writers

PARIS--(BUSINESS WIRE)--Dec. 18, 2001

Today Alcatel (Paris:CGEP.PA and NYSE:ALA), and Thomson multimedia (Paris Euroclear:18453 and NYSE:TMS), global leaders in broadband access and entertainment solutions have shown that broadband DSL technology can deliver compelling, entertainment services over television.

In Paris, Alcatel and Thomson jointly demonstrated instant, interactive and personalized TV and movies delivered via a simple telephone line. Both companies consider that this breakthrough will further unleash the potential of the DSL technology, thereby opening a new era in broadband entertainment.

The DSL initiative unveiled today demonstrates the remarkable advances made by the two companies in broadband access for entertainment services. Super encoders from Nextream, a Thomson/Alcatel joint venture, now allow for the delivery of rich multimedia content, including MPEG-2 compressed digital video, with less than 1Mb of required bandwidth. Alcatel's carrier networking products, including a complete range of broadband access as well as networking solutions, manage and transmit the video, voice and data traffic over the telecommunications network and deliver it to Thomson's advanced digital xDSL decoder gateway set-top product.

Over the past two years, the growth in DSL coverage and the amount of bandwidth available to households around the world has risen dramatically. At the same time the costs associated with installing a complete DSL infrastructure have decreased. Via DSL, high speed Internet has become an everyday reality for a growing number of consumers. Now, they will also enjoy instant video on demand, personalized TV and on-line gaming on their own TV set.

Thanks to DSL, service providers worldwide can now reap the benefits of the world's installed base of telephone lines to deliver broadband entertainment services to these customers. Service providers possess an enviable arsenal to generate additional revenues in this evolving market, reclaiming and retaining customers with a simple `triple play' of voice, video and data over an existing and familiar infrastructure. In a recent study by consultants Schema(a), an average of 45 percent of European consumers questioned were `very or quite likely' to pay for a video-on-demand service -- a massive potential for uptake of these services.

"DSL has already extended its reach to become the universal platform for Internet and business access," said Serge Tchuruk, Alcatel chairman and chief executive officer. "The advent of personal entertainment marks another major evolution for DSL, from the PC to the networked household appliance. Alcatel, as the worldwide leader in broadband access, is working with Thomson to ensure this transformation leads to swift revenue generation for service providers."

"Broadband entertainment services are the next big opportunity for all the actors of the digital media chain," said Thierry Breton, chairman and chief executive officer of Thomson multimedia. "Consumers are demanding more interactivity and content choice from their TV and PC. Content creators are broadening their offerings. From content development, distribution and access, Thomson, working with Alcatel, intends to play a leading role delivering advanced digital end-to-end solutions".

(a) "Interactive Entertainment: Delivering Revenues in the Broadband Era", Schema, June 2001.

About Thomson multimedia

With sales of 9.1 billion euros (U.S. $ 8.3 billion) in 2000 and 73,000 employees in more than 30 countries, Thomson multimedia (Paris Euroclear:18453) (NYSE:TMS), provides a wide range of video (and enabling) technologies, systems, finished products and services to consumers and professionals in the entertainment and media industries. To advance and enable the digital media transition, Thomson multimedia has five principal activities: Digital Media Solutions, Displays and Components, Consumer Products, Patents and Licensing and New Media Services. The company distributes its products and services under the THOMSON, RCA and TECHNICOLOR brand names. For more information: www.thomson-multimedia.com.

About Alcatel

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 110,000 employees and sales of EURO 31 billion in 2000, Alcatel operates in more than 130 countries. For more information: www.alcatel.com