PARIS -– Alcatel (Paris: CGEP and NYSE: ALA) announced today an agreementwith Lattelekom to expand the service provider’s DSL network. Winning the contract with Lattelekomgives Alcatel a unique opportunity to bolster its presence as a supplier of DSL solutions throughoutthe burgeoning Baltic region.

The agreement enables Lattelekom, a consortium comprised of Telia Sonera and the Latvian State,to expand its broadband network while giving it the flexibility and scalability to keep up withcustomer demand for enhanced broadband services. Lattelekom’s customers will enjoy the benefitsof a broadband world, with high speed access to numerous multimedia services.

Through this agreement with Lattelekom, Alcatel will expand its presence as a key supplier of datatransmission equipment and service solutions towards the DSL domain. As part of the agreement,Alcatel will deploy a compact version of its market leading 7300 ASAM product. This will equipLattelekom’s network with a scalable and flexible configuration to roll out high speed Internet accessand enhanced broadband services, such as "HomeDSL", "StartDSL" and "UltraDSL", enablingcustomers to have access to Virtual Private Networks, audio and video streaming services,videoconferencing and multimedia solutions.

Since 1994, Alcatel has been a key supplier of switching and digital loop carrier equipment toLattelekom. The service provider’s ATM network runs 100 percent on Alcatel’s equipment. As DSLdeployment is still in its early phases in Latvia, this contract holds many new growth opportunities forAlcatel.

”This agreement further demonstrates our commitment to helping Baltic-based service providersevolve their broadband networks,” said Michel Rahier, President of Alcatel’s fixed networkingactivities. “Expanding our relationship with Lattelekom gives us access to new market opportunitiesfor our DSL products, while also increasing Alcatel’s visibility as a leading supplier of broadbandsolutions in the region.”

“We have a long history with Alcatel, and we felt their vision and solutions for evolving ourbroadband service offering matched our growth objectives in Latvia,” said Mrs. Leena Suhonen,CEO of Lattelekom. “As a world leader in delivering DSL solutions, we are confident that Alcatel’sinvolvement in our network build-out plans will enable us to grow our customer base andbroadband services now and in the future.”

Alcatel SA