Telstra selects Alcatel to drive transformation to an IP-based network in estimated EUR 2.18 billion proposed agreement

Paris, November 15, 2005 - Alcatel (Paris: CGEP.PA and NYSE: ALA) today announces that it has been selected by Telstra as one of its key strategic partners for the operator’s ground breaking IP network transformation project.

As part of the proposed five-year agreement worth AUD$3.5 billion (EUR 2.18 billion or USD 2.55 billion), Alcatel will provide Telstra with comprehensive network solutions and end-to-end integration capabilities. Alcatel’s responsibilities include network design and integration, product supply, deployment, maintenance and on-going support.
Telstra and Alcatel today entered into a Memorandum of Understanding under which they will negotiate formal agreements to reflect their strategic partnership.

Telstra’s Network Transformation Project will migrate the Australian carrier’s voice and broadband access networks into a single IP-based infrastructure for the cost-effective delivery of services to Telstra’s customers.

Alcatel’s responsibilities include broadband access to consumers and enterprises as defined in Telstra’s plan, Ethernet aggregation, NGN voice, as well as network integration, support and maintenance. Alcatel will also create a Hosted Integration Centre, which will support integration testing and introduction of technology into Telstra’s network. The aim of the centre is to provide a single facility to support product testing, trials and customer demonstrations.

More specifically, Alcatel will provide Telstra with IP DSLAMs, Fibre to the Node (FTTN) and Fibre to the Premises (FTTP) solutions, Optical Ethernet Aggregation, NGN Softswitches and associated Media Gateways.

“With this strategy, Telstra will be in a uniquely competitive position, putting their customers first while driving down the operational costs of the company,” said Mike Quigley, President and Chief Operating Officer of Alcatel. “Telstra will benefit from Alcatel’s leadership in technologies and end-to-end integration, enabling them to successfully transform their network.”

This agreement further reinforces Alcatel’s global position as the industry’s premier integration partner and is a critical milestone in the alliance between Telstra and Alcatel, which has spanned more than 100 years.

Following SBC’s selection of Alcatel in a USD 1.7 billion network transformation, the agreement with Telstra highlights the trend of the leading operators to select a few key partners as they transform their networks and offer next generation services to their customer base.

A conference call will be held at 11:00 am CET today (Tuesday, November 15, 2005).

Media representatives and analysts wishing to ask questions during the Q&A session may dial in and request the “Alcatel teleconference” at the following dial-in numbers:

From the United States : (800) 230 1074
International : (001 612) 332 0107

The conference call will be available for digital replay from 15 November at 2:30 pm CET and end on 29 November at 11:59 pm

From the US : (800) 475 6701
International : (001 320) 365 3844
Access code : 804577

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 12.3 billion and 56,000 employees in 2004, Alcatel operates in more than 130 countries.

Contact Information

Aurélie Boutin-Guezennec

Paris Hq Corporate Press Department

Alcatel

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