Telstra and Alcatel announce Euro 270 million works program for 2006/07

Paris, August 31, 2006 - Telstra Corporation and Alcatel (Paris: CGEP.PA and NYSE: ALA) today announced a works program for Telstra’s fixed network transformation in 2006/07, with an expected value of Euro 270 million (AUD460 million).

This works program is part of Alcatel and Telstra’s strategic supplier relationship announced in November 2005. It will see Telstra move to the next phase of its Internet Protocol (IP) network transformation that will deliver leading-edge services to 5.3 million Telstra customers over the next five years.

In 2006/07, Alcatel will establish an IP network footprint in five Australian cities - Melbourne, Sydney, Brisbane, Perth and Adelaide - by supplying and deploying its leading portfolio of technology including IP-DSLAMs, Ethernet aggregation and optical networking solutions.

“Since announcing its transformation strategy in November 2005, Telstra has made solid progress in its move to a next generation fixed network - Telstra connected its first customer to Alcatel’s IP-DSLAM technology early this year,” said Telstra’s Executive Managing Director of Network & Technology, Mr. Dan Burns.

“These upgrades are important for future-proofing our network over the next five to ten years, where we will be able to provide customers with access to offerings such as high speed internet, telecommuting, video conferencing and video delivery of services in general.”

Another milestone achieved in the lead up to this next phase is the establishment of Telstra’s new state-of-the art Integration Laboratory in Australia, which will be managed by Alcatel.

“This Laboratory will undertake end-to-end testing of next generation technology to allow its smooth integration into Telstra’s network,” Mr. Burns said.

As part of the 2006/07 works program, Alcatel will test the first mated pair of softswitches in Australia, in the Telstra Integration Laboratory.

Frédéric Rose, President of Alcatel’s Asia Pacific activities, said: “This confirms Alcatel’s participation as a key strategic supplier to Telstra as it continues the transformation of its fixed network to a next-generation IP-based network. Alcatel’s integrated and flexible architecture will provide Telstra with a scalable, future-proofed network that can simultaneously deliver new personalized multi-media services to residential customers and advanced virtual private network services to businesses.”

The 2006/07 works program reinforces Alcatel’s position as the worldwide leader in providing technology solutions and integration services that allow carriers to reduce the costs and complexity of large-scale IP network transformation.

This technology upgrade is unrelated to Telstra’s previous Fibre to the Node (FTTN) proposal, which was put on hold earlier this year.

About Telstra
Telstra is Australia’s leading telecommunications and information services company, with one of the best known brands in the country. We offer a full range of services and compete in all telecommunications markets throughout Australia, providing more than 10.3 million Australian fixed line and more than 6.5 million mobile services. For more information: http://www.telstra.com

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

About Alcatel’s user-centric triple play
To meet today’s quest for increased personalized and interactive services, Alcatel helps worldwide operators transform their networks and deliver a new end-user experience. Alcatel’s user-centric triple play builds on its leadership in broadband technology, IP networking, optics, new multimedia and video applications, as well as end-to-end services integration. End-users will enjoy unique, exciting services including video on demand, personal TV, community channels, online gaming and sharing of music, photos and home videos, all delivered simply and seamlessly via a range of devices and networks. Alcatel is currently involved in more than 35 triple play network projects worldwide including AT&T, BellSouth, France Telecom, Swisscom, FastWeb and Chunghwa Telecom. For more information: http://www.alcatel.com/tripleplay

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Robin Karvo

Corporate Media Relations

Alcatel

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