Alcatel issues its 2005 Sustainable Development report

Paris, May 10, 2006 - Alcatel (Paris: CGEP.PA and NYSE: ALA) today announced that it has issued its fourth Sustainable Development report. This report underlines Alcatel’s commitment to corporate social responsibility and presents the 2005 key achievements and initiatives undertaken by the company. During the year, Alcatel focused on the following programs:

* Digital inclusion: reinforcement of Alcatel’s commitment to achieve a more inclusive information society by developing innovative projects tailored to the need of local populations in under-served areas.
* Human Resources: actively promoting career development and continuous learning. By launching the “Women in Leadership” initiative and signing the French Diversity Charter, Alcatel also reaffirmed its commitment to bringing more diversity into its teams.
* Social responsibility within the supply chain: by initiating personalized dialogue with suppliers to ensure that Alcatel’s principles and values are duly respected and applied.
* Environment: consolidation of the existing processes to be ready for the implementation of the European WEEE* and RoHS** directives and reduction of product power consumption.
* Corporate citizenship actions throughout the world with global and local initiatives.

With respect to corporate governance and business ethics, Alcatel has also recently created the position of Chief Compliance Officer, underlining its commitment to state-of-the-art business principles, among which are those stated in the United Nations Global Compact that the company signed in 2003.

Moreover, Alcatel’s listing in four major sustainable development indexes is recognition of the company’s efforts for a continuous progress based approach to combine economic development with its social and environmental responsibilities.

Serge Tchuruk, Alcatel’s Chairman and CEO, stated: “We continue to progress in a socially responsible way. We are entering a new phase with newly-set objectives for the 2006-2008 period. The progress requirements that we impose on ourselves are the best guarantee of the sincerity of our commitment towards our shareholders, our customers, our employees, and the communities in which we conduct business.”

The 2005 Sustainable Development report is available on Alcatel’s corporate Internet website, at the following address: http://www.alcatel.com/sustainable/

*Waste Electrical and Electronic Equipment
**Restriction of the use of certain Hazardous Substances

About Alcatel
Alcatel provides communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or employees. Alcatel brings its leading position in fixed and mobile broadband networks, applications and services, to help its partners and customers build a user-centric broadband world. With sales of EURO 13.1 billion and 58,000 employees in 2005, Alcatel operates in more than 130 countries. For more information, visit Alcatel on the Internet: http://www.alcatel.com

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Mark Burnworth

Corporate Media Relations

Alcatel

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