Alcatel Acquires eDial, Spatial Wireless

PARIS -- Alcatel (Paris : CGEP.PA and NYSE : ALA) today announced it has acquired privately held US-based eDial, Inc., a leading provider of conferencing and collaboration solutions for enterprises and service providers. The acquisition of eDial enables Alcatel to continue expansion of its enterprise software offerings.

eDial is based in Waltham, Mass. and employs approximately 30 people. The company currently serves more than 100 customers, including enterprises and service providers, through direct and indirect channels. The acquisition was made for approximately $27 million (approx. €22 million) in Alcatel stock (ADS) and cash. The deal closed today.

eDial's product portfolio includes an open, SIP* software-based platform and applications for conferencing for voice, data and video. eDial also provides a solution for real time collaboration that integrates instant messaging, application sharing and presence capabilities.

"The ability for enterprises to conduct real-time conferencing and collaboration that combines voice, video and data with instant messaging and presence increases employee efficiency and contributes to improved business processes," said Jean-Christophe Giroux, president of Alcatel's Enterprise Solutions activities. "eDial ideally complements our open software and applications strategy, especially our Unified Communications suite."

As part of the acquisition, eDial's current development, sales and support operations will remain in Waltham. The company's experienced team of experts will serve as Alcatel's 'center of excellence' for developing conferencing and collaboration solutions.

"Alcatel's acquisition of eDial sets the stage for the next wave of development for our business, employees and customers," said Jill Smith, chief executive officer, eDial. "Alcatel is a recognized leader in communications worldwide, and we look forward to joining their team and contributing to their growth and innovation in conferencing and collaboration."

Alcatel SA

eDial Inc.



---In a separate release---

PARIS -- Alcatel (Paris: CGEP.PA and NYSE: ALA) today announced that it has signed an agreement to acquire Spatial Wireless, a privately held US based company, leader in cost-effective, software-based and multi-standard distributed mobile switching solutions. This acquisition builds upon the successful cooperation engaged last year between Alcatel and Spatial Wireless and announced in March 2004.

With 225 employees, Spatial Wireless has offices in the US and in India, and is headquartered in Richardson, Texas (US). Under the terms of the agreement, Alcatel agreed to pay approximately USD250 million (approx. Euro 205 million) in Alcatel American Depositary Shares (ADS) for the total capital of Spatial Wireless. Spatial Wireless shares and options will be exchanged for a number of Alcatel ADSs to be determined at closing, according to an exchange ratio and within the limits specified in the agreement.

The deal allows Alcatel to leapfrog traditional mobile switching technologies with a commercially-available Next-Generation Networks (NGN) solution, designed and ready for IP Multimedia Subsystems (IMS). This future-proof solution ideally complements Alcatel's portfolio of next-generation IMS-ready products, addressing both fixed and mobile environments, and paves the way for future converged IMS architecture and multimedia services.

Spatial's flagship product, Spatial Atrium®, is a multi-standard and field-proven mobile softswitch that controls distributed media gateways and manages call/session control for voice and data services. It works seamlessly in GSM/EDGE, 3G/UMTS and CDMA networks. It also enables smooth evolution to 3GPP Release 5 and Release 6 networks via software-only upgrades, thus ensuring long-term investment protection in preparation for IMS introduction.

Spatial's distributed solution has established a clear leadership position in the market over the past eighteen months. It is already in commercial use and in market trials, with major GSM and CDMA operators in the world, in particular in North America, China, and India - with over one million ports deployed in 2004. Available now, this distributed architecture solution provides mobile operators with major cost savings, while offering high scalability and capacity. Additionally, it offers an extensive set of features that can easily be personalized and extended according to individual operator requirements.

Designed as an open and highly portable software suite, Spatial Atrium® is set to benefit to the maximum from major IT innovations both in hardware and operating systems. This fits well within Alcatel's platform strategy, focusing on cost-effectiveness and leveraging the benefits of Carrier-Grade Unix and Linux operating systems, as well as those benefits brought by the use of Advanced Telecom Computing Architecture (ATCA) specifications.

"Through the acquisition of Spatial Wireless, Alcatel leapfrogs traditional mobile switching technologies and builds a powerful offer adapted to address the US and CDMA markets, in addition to our GSM/UMTS-based customers. Our solution offers a natural evolution path to the introduction of IMS, thus accelerating the roll-out of Alcatel's user-centric broadband strategy" declared Mike Quigley, Executive Vice-President and President of Alcatel North America.

"Spatial's team is particularly proud to join the Alcatel family", added Pardeep Kohli, co-founder, president and chief executive officer of Spatial Wireless. "Based on the extraordinary response that Spatial's solution has already received from Tier 1 operators throughout the world, combined with Alcatel's strategic vision and strength, we're now set to make it happen!"

The closing of this acquisition is expected during the fourth quarter 2004, subject to the signing of definitive agreements and receipt of necessary approvals from shareholders and regulatory authorities.

Alcatel SA

Spatial Wireless