France’s Phone Systems and Network selects Alcatel’s IMS solution to develop its VoIP service offering in France

Paris, May 11, 2006 - Alcatel (Paris: CGEP.PA and NYSE: ALA) announced that Phone Systems and Network, an alternative French operator, has completed the transformation of its nationwide local and long distance network from TDM to Voice-over-IP (VoIP) based on elements of Alcatel’s IP multimedia subsystem (IMS) solution.

By migrating its legacy TDM infrastructure to an all VoIP-based infrastructure, Phone Systems and Network has become the first pure play VoIP alternative operator in France. They can now deliver a range of advanced and competitively priced enterprise and residential IP services including IP Centrex and high quality local and long distance VoIP services.

"We chose Alcatel as our partner for this project because of their global experience in completing some of the largest network transformation projects as well as their local support capabilities" said Eric Saiz, Managing Director of Phone Systems and Network. "Using Alcatel’s solution, we can now expand our services offering through a cost-optimized VoIP infrastructure"

"Phone Systems and Network represents a new generation of competitive operators turning to VoIP technology to reduce their cost of infrastructure and achieve integrated and converged services" said Monika Maurer, President of Alcatel’s fixed solutions activities. "This contract represents a new reference in France for elements of our IMS solution, and reaffirms our leadership in handling complex end-to-end network transformation projects".

The solution provided to Phone Systems and Network include key elements of Alcatel’s IMS solution: the Alcatel 5020 Softswitch and the Alcatel 7515 Media Gateways, providing the link between the worlds of voice and IP data, the Alcatel 8688 Media Resource Function (MRF) providing advanced audio interactions in IP networks and the Alcatel 1515 Compact Cross Connect, bridging the traditional public telephone network with the IP-based next generation network. Alcatel also ensured the complete integration of network equipment as well as assisted Phone System and Network in the migration of their traffic from the existing TDM infrastructure to the new VoIP network.

About Phone Systems and Network
Phone Systems and Network SA, a French telecoms service provider, was created in 1994 and has been listed on the Paris stock market since 1998. Phone Systems and Network is developing a complete know how in IP telecommunications services (VoIP) and has enjoyed a steady growth with today more than 100,000 subscribers to its services. For more info, visit http://www.PhoneSystems.net

About Alcatel
Alcatel provides communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or employees. Alcatel brings its leading position in fixed and mobile broadband networks, applications and services, to help its partners and customers build a user-centric broadband world. With sales of EURO 13.1 billion and 58,000 employees in 2005, Alcatel operates in more than 130 countries. For more information, visit Alcatel on the Internet: http://www.alcatel.com

Contact Information

Stéphane Lapeyrade

Corporate Media Relations

Alcatel

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