China Telecom selects Alcatel’s IP solution to bring advanced broadband services to Jiangsu Province

Paris, July 25, 2006 - Alcatel (Paris: CGEP.PA and NYSE: ALA) today announced that Jiangsu Telecom, a subsidiary of China Telecom, has selected Alcatel’s IP service routing solution to expand and optimize its metropolitan area network and broaden its IP-based data service portfolio. The Alcatel solution will enable Jiangsu Telecom to offer faster, highly reliable, and premium data services for consumers and enterprises across Jiangsu Province. The contract was won through Alcatel Shanghai Bell, Alcatel’s flagship Chinese company.

Jiangsu Telecom will deploy the Alcatel 7750 Service Router (SR) in the province’s four major cities, Nanjing, Wuxi, Yangzhou and Zhenjiang, where they anticipate fast-paced growth in demand from the consumer and business markets for advanced user-centric broadband services.

Upon completion of the project by the end of this year, Jiangsu Telecom will be able to deliver multiple services from a single IP network infrastructure, and with the Quality of Service (QoS) required to meet strict Service Level Agreements. Services include high speed Internet access for residential users as well as Layer 2 and 3 virtual private network (VPN) services for enterprises.

“This contract establishes Alcatel as the leading IP supplier to Jiangsu Telecom,” said Gerard Dega, President of Alcatel Shanghai Bell. “The Alcatel IP solution has the capability to ensure non-stop service delivery which is critical to meet today’s stringent market expectations. It also accelerates time to market through rapid service provisioning, ensuring service providers can move quickly to capture new market opportunities.”

Today, all major Chinese operators including China Telecom, China Unicom, China Netcom and China Mobile have selected the Alcatel 7750 Service Router to optimize the delivery of high-performance carrier data, voice and video services. China Telecom alone has selected the solution in 17 major provinces, including Xinjiang, Tibet, Qinghai, Gansu, Ningxia, Shaanxi, Guangdong, Shanghai, Jiangsu, Anhui, Hubei, Fujian, Jiangxi, Henan, Sichuan, Liaoning and Guizhou. According to Synergy Research Group, Alcatel is #2 in the Services Edge Router category in Q1 2006, with 18% market share, following four consecutive quarters of market share gain.


About China Telecom
China Telecom Group, officially established in 2002 following the division of the former China Telecom, is a key fixed telecom operator in China. The group has 21 provincial (municipal and autonomous regional) corporations in southern China, holding 70% of the national trunk-line transmission network assets owned by the former China Telecom. Subordinated to the central government, the new China Telecom has a 158 billion yuan (RMB) registered capital. Currently, China Telecom operates domestic and international fixed-line networks, providing voice, data, video, multimedia and information services. It is also engaged in international telecom accounts settlement and overseas market exploration.

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

Alcatel

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