PARIS -- Alcatel (Paris: CGEP.PA and NYSE: ALA) announced today it has been awarded a major contract by Jiangsu Netcom, a subsidiary of China Netcom, to deploy a Next Generation Network (NGN) with a total capacity of 500,000 subscriber lines in Jiangsu Province, China. The network will be the largest NGN network ever deployed for China Netcom. The contract was won through Alcatel Shanghai Bell, Alcatel's flagship Chinese company.

Upon completion of the deployment in August 2004, Jiangsu Netcom will be able to develop a wide range of high-quality telecom services including local and long distance voice over IP, traditional voice with value-added services, multi-media conferencing, voice virtual private network (VPN), IP Centrex and Find Me/Follow Me. In particular, the Find Me/Follow Me service will enable end users to be contacted through different telecom devices such as fixed line telephones and mobile handsets.

"This is a significant win for Alcatel in China," said Michel Rahier, chief operating officer of Alcatel's fixed communications activities. "The contract will further strengthen our leadership position in the NGN market in China as well as in the Asia Pacific region, and lay a solid foundation for our future cooperation with China Netcom. As the sole supplier in this project, we are confident of Alcatel's ability to ensure that China Netcom achieves further business growth."

Alcatel's NGN strategy is based on its Open Path to Enhanced Networking (OPEN) Program. The OPEN Program comprises products, solutions and a services suite that enable service providers to meet the demand for user-centric services that cross both fixed and mobile networks. The OPEN Program also enables them to address the requirement for voice migration to a packet based infrastructure and to increase revenue by targeting their broadband customer base with new multimedia services.

Under the contract's terms, Alcatel will deliver its end-to-end NGN solutions from the core through to the access network as well as terminals, including the Alcatel 5020 Softswitch, 7515 trunking gateway, the Alcatel IP Centrex application server, media server, session border controller, integrated network management platform, access gateway, IAD and SIP video phones. In addition, Alcatel will provide its carrier-grade, 7750 Service Router to build MPLS (multiprotocol label switching) based virtual private networks.

Alcatel SA

China Netcom Corp. Ltd.