Alcatel Plans Joint Venture in China

DALLAS -- Alcatel (NYSE: ALA) and FiberHome Telecommunication Technologies of Hubei, China announced the signature of an Memorandum of Understanding (MoU) to manufacture and sell Alcatel's complete optical fiber product portfolio, together with FiberHome's optical cabling portfolio, in China. The new joint venture will become one of the leading optical fiber suppliers in China, which is one of the fastest growing optical fiber markets and is expected to almost double in size by 2006.Located in the Hubei Province, in the central part of China, the new joint venture between Alcatel's optical fiber activity and FiberHome will take the form of a closed joint stock company, with the two companies holding 50/50 share. Production of the new fiber is slated for early 2003 and the joint venture is well-positioned to satisfy the increasing demand in China, which is expected to become one of the top three global markets for optical fiber.Alcatel will allow the joint venture to gain advanced technological expertise in the entire process of manufacturing optical fiber and preforms, which is based on Alcatel's proprietary process. Furthermore, the complete range of Alcatel's optical fiber products will be made available to the joint venture, including a range of specialty fibers. Based on the ongoing needs of the Chinese market, the joint venture will have access to any new Alcatel optical fiber and cable products, as well as enhancements to the fiber manufacturing process. FiberHome will contribute land and building resources to the joint venture, including their optical cable plant and cabling expertise."The proposed joint venture is another step in Alcatel's strategy to strengthen its position in China's market and is a natural extension of the long-term, working relationship between Alcatel and FiberHome," stated Jacques Blanc, president of Alcatel's optical fiber. "A key element of the agreement is technology transfer, which confirms Alcatel's strong commitment to the booming optical fiber market in China, and our goal to become one of the leading optical fiber and cable suppliers in this market."Alcatel SAFiberHome Telecommunication Technologies Co. Ltd.