PARIS -- Alcatel (Paris: CGEP.PA and NYSE: ALA) has signed a contract with Telemar, the only 100% Brazilian telecom company, , to upgrade and extend its optical transport network throughout the country.

Alcatel's solution enables Telemar to increase the flexibility, efficiency and reliability of its existing network to deliver new data services based on Ethernet technology, while achieving a significant decrease in operational costs.

With completion expected in August 2004, the project will increase Telemar's network capacity for Brazil's most important information routes, which connect the cities of Belo Horizonte, Brasília, Rio de Janeiro and São Paulo.

Alcatel will deploy an advanced solution based on its latest dense wavelength division multiplexing (DWDM) and synchronous digital hierarchy(SDH) technologies. The Alcatel 1678 Metro Core Connect is a scalable platform that integrates data and transport functionality into a single node with ultrafast mesh restoration capabilities. Alcatel will also supply its next-generation data-aware SDH Optical Multi-Service Node (OMSN) systems and DWDM long-haul solution, including the 1626 Light Manager. The integrated Alcatel 1350 management suite will provide end-to-end network and service management across all deployed technologies.

"With Alcatel's leading-edge transport solutions, Telemar will be able to further improve Service Level Agreements offered to its customers, while securing investment protection and cost-effective network evolution,"stated Geraldo Araújo, networks director of Telemar.

"This contract underlines Alcatel's commitment to enable the future-proofevolution of Telemar's optical transport infrastructure. As Telemarsimplifies its network infrastructure and moves toward an IPtransformation, Alcatel's optical networking solution helps lay thefoundation for improved quality of service and therefore continued customer success" said Romano Valussi, president of Alcatel's optical networks activities.

Alcatel SA