Alcatel awarded a Euro 33 million contract to provide the first ERTMS/ETCS signaling systems for commuter lines in Spain

Paris, November 8, 2006 - Alcatel (Paris: CGEP.PA and NYSE: ALA) today announced that it has been awarded a Euro 33 million contract by the Spanish Ministry of Transport, through the Railways General Office. It is the first time ERTMS/ETCS signaling systems for high speed lines are applied to commuter lines.

This award is part of a global Euro 69 million project to provide safety and communications solutions with ERTMS/ETCS Level 1 and 2 for the new tunnel linking Atocha - the central high speed and commuter lines station - and Chamartin - the main north and northwest bound station - in Madrid, and to extend the ERTMS/ETCS level 1 system to the convergent sections of five commuter lines.

Alcatel will supply its interoperable 6481 AlTrac/ETCS Level 2 solution with a Radio Block Center (RBC) located at Atocha main station, and its 6413 AlTrac/ETCS Level1 solution for commuter lines C3 and C4 connecting Madrid’s great South, as well as for Atocha and the new Sol-Gran Vía stations inside the new tunnel.

Additionally, Alcatel will extend the Atocha commuter lines station electronic interlocking system, based on Alcatel 6111 LockTrac technology, to cover a big part of the new 8-kilometer long tunnel and to control the Sol-Gran Via station. Alcatel will also provide the ERMTS/ETCS interfaces with the Southern area interlocking systems, mostly based on Alcatel technology.

This contract confirms the trust that Spanish railways Administration is placing in Alcatel and adds to a list of several achieved and ongoing projects in Spain. Alcatel is involved in the Madrid - Seville, Madrid - Saragossa - Lleida, Lleida - Barcelona, Madrid - Segovia - Valladolid, Córdoba - Málaga and the Atlantic Axis high speed lines.

* ERTMS/ETCS: European Rail Traffic Management System / European Train Control System

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 Railway Solutions
To meet the challenge of increased mobility, Alcatel offers a host of advanced railway solutions that ensure safe, reliable and comfortable transportation of passengers and freight through the network. Drawing on wide international experience in all aspects of transport automation and network integration and services, Alcatel is a leading worldwide supplier for signaling - train control, train routing, control centers - and integrated communications solutions to carry and distribute voice, data and video to and from all sites of urban and main line rail. Whether enhancing, renewing or building new lines, Alcatel is an ideal partner to address the operational needs of main line and urban rail operators.

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Juan Porro Herrera

Corporate Media Relations

Alcatel

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