Alcatel Buys Spatial WirelessAlcatel Buys Spatial Wireless

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.

"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.

Alcatel SA

Spatial Wireless