Italtel and Cisco Announce Renewed Strategic Alliance Targeting the Service Provider Market in Europe, Middle East and Africa.

MILAN, Italy -- The Companies Will Focus Joint Development, Sales and Marketing Activities to Address Business Opportunities in the Next Generation Network and Business Voice Services Markets

Italtel, the leader in network solutions for voice/data/video integration, and Cisco Systems, Ltd. (NASDAQ:CSCO), the worldwide leader in networking for the Internet, today announced a strengthening of their four year technological and commercial strategic alliance.

As part of the alliance, the companies will focus joint development, sales and marketing activities on addressing the migration of traditional voice networks to next generation Internet Protocol (IP)-based networks. At the same time, Italtel and Cisco will drive growth of IP Communications into the corporate business voice services segment across Europe, Middle East and Africa (EMEA). Growth in these respective markets has been demonstrated by current forecasts from industry analysts. According to Synergy Research Group forecasts, the EMEA Carrier Packet Voice market will show a compound annual growth rate (CAGR) of 52.75% for 2004 to 2008(a). For the EMEA Enterprise IP Telephony market, Synergy has forecast a CAGR of 40.4% for 2004 to 2008, creating an EMEA market value of $3.5 billion in 2008(b).

The next generation VoIP networks built upon Italtel and Cisco technology deliver over 370 Billion VoIP minutes per year. To date, Cisco has installed more than 14 Million VoIP gateway ports and 4 million IP Phones, replacing 6000 TDM phones every day.

Today's telecommunications market is undergoing a transformation -- many service providers are planning the migration of their existing voice infrastructures to IP-based networks, and customers are increasingly demanding IP-based communications solutions replacing traditional PABX. To address such needs, Italtel and Cisco have developed a complete architecture for hosted and managed IP voice services with a standards-compliant next generation network platform. This gives service providers the ability to optimise costs and get their offerings to market faster by taking advantage of their existing voice over IP infrastructure.

Reinforcement of the Italtel/Cisco strategic alliance strategy has been positively received by Cable & Wireless who have recently chosen Italtel and Cisco's Next Generation Communications solutions.

Francesco Caio, Chief Executive Officer of Cable & Wireless, commented: "Cable and Wireless has recently launched its broadband initiative in the UK. The company is uniquely positioned to take advantage of the opportunities of the Local Loop Unbundling in the country given the reach of its national network, the second largest in the UK. We are now offering an innovative set of services that combine fast Internet access and high quality voice over the same line. As part of our investment in networks and systems, we chose to rely on Italtel's softswitch technology, due to its quality and reliability, as demonstrated by the growing number of implementations in very demanding and innovative networks."

Cisco and Italtel will work together to expand the EMEA market, through joint solutions based on Italtel iMSS (Italtel Multi-Service Solutions) and on Cisco IP Communications platforms. The Italtel Multi-Service Solution, based around the Italtel Softswitch, can deliver IP voice services for the business market, and the migration of service providers' traditional TDM networks to next generation networks with IP technology.

"Together with Cisco," commented Chief Executive Officer of Italtel, Mauro Righetti, "we have achieved important results in these last few years. We have confirmed our presence among the main Italian operators and acquired several new customers abroad. Our solutions in softswitch technology and those of Cisco in IP Communications and data networking are the best in their class, and our joint offer is undoubtedly one of the most competitive currently present on the market. We have decided to strengthen our alliance in order to render our synergy in the development of innovative solutions for our customers increasingly effective, and increase our possibilities for success in the next generation networks market, which is opening up very quickly."

"Through our closer alliance with Italtel, we have strengthened our value proposition to service providers who are staking their long-term future on IP technology," said Robert Lloyd, president of EMEA operations, Cisco Systems, Inc. "It is important that we offer customers a clear and cost-effective strategy for migration to next generation networks. Together, we have proven our solutions with telecommunications operators in Italy and in some countries in Western Europe and now, we are looking forward to extending our offering into more than 100 countries in Europe, Middle East and Africa."

About Cisco Systems

Cisco Systems, Inc. (NASDAQ:CSCO), the worldwide leader in networking for the Internet, this year celebrates 20 years of commitment to technology innovation, industry leadership and corporate social responsibility. Information on Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

About Italtel

Italtel designs, develops and installs new-generation integrated multi-service networks (voice/data/video) ensuring fixed and mobile operators and ISPs reliable and open to networking and technological developments infrastructures, thanks to its systems integration capability. In the last ten years Italtel has invested a significant part of its revenues in innovation. Revenues for 2003 totaled 591.8 million euro. Since 2000, Italtel main shareholders are Clayton, Dubilier & Rice, Telecom Italia and Cisco Systems. Website: www.italtel.com.

Cisco, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any of its resellers.

Italtel, Italtel logo and iMSS are registered trademarks of Italtel S.p.A.

Notes to editors:

(a) Synergy Research Group forecasted EMEA Carrier Packet Voice revenue to grow 43.0% in 2004 to $173 million. Their long term forecast predicts a CAGR of 52.75% (2004 to 2008). The introduction of Voice over Packet in Service Provider networks has drastically impacted the traditional Class 5 and Class 4 TDM Phone Equipment market as well as creates an opportunity for non traditional service providers to provide local and long distance calling. (Source: Q1 2004 Carrier Packet Voice EMEA Forecasts, Quarterly Update published 18 July 2004, Synergy Research Group, Inc.)

(b) Synergy Research Group's Enterprise IP Telephony forecast is primarily built upon the displacement of Tradition TDM equipment. In EMEA, Synergy has measured current rate of penetration at 21.9%, modelled the forecast to reach a penetration of 30.0% in 2004 and to further reach a penetration rate of 83.0% in 2008. Also taking into account forecasted EMEA GDPs and a stable and/or growing rate of IT capital investment as component of GDPs, SRG is forecasting the EMEA Enterprise IP Telephony forecast to be robust with a CAGR of 40.4% (2004 to 2008) creating an EMEA market value of $3.5 Billion in 2008. (Source: Q1 2004 Enterprise Voice EMEA Forecast, Quarterly Update published 6 June 2004, Synergy Research Group, Inc.)