China Netcom selects Alcatel for next-generation IP network transformation

Paris, September 13, 2006 - Alcatel (Paris: CGEP.PA and NYSE: ALA) today announced it has been selected by Tianjin Netcom, a subsidiary of China Netcom, to transform the service provider’s existing network to deliver next-generation services across the municipality of Tianjin. By migrating to a new service-oriented, IP-based next generation network, Tianjin Netcom’s residential and business customers will be able to enjoy a wider range of advanced services, from basic multimedia to IP Centrex services, prepaid phone, color ring-back tones and number portability. In addition, the Alcatel solution is ready for fixed-mobile convergence, supporting both fixed and 3G mobile offerings on the same platform. The contract was signed through Alcatel Shanghai Bell, Alcatel’s flagship Chinese company.

Alcatel will deploy its comprehensive IP multimedia subsystem (IMS) solution, which includes the Alcatel 5020 Softswitch, the Alcatel 7510 Media Gateway, Alcatel’s multiservice access gateways, and the Alcatel 1430 Unified Subscriber Server. Alcatel will also deploy its multiservice edge router, the Alcatel 7750 Service Router (SR), to build a highly-available and feature-rich service delivery infrastructure.

"We see market demand for multimedia services growing every day. This notable trend drives us to transform our existing fixed network to an all IP network leveraging the latest technology" said Huo Haifeng, General manger of Tianjin Netcom. "We are confident in Alcatel’s expertise to implement large integration projects. Its industry-leading solution will enable us to roll out a wider variety of new and high quality multimedia services, which will help increase customer satisfaction"

"We are honored to be selected by Tianjin Netcom to transform its network for next generation services, which further reinforces our leading position in the Chinese market" said Michel Rahier, President of Alcatel’s fixed communications activities. "Our worldwide experience in IP network transformation, thorough understanding of the Chinese market and end-to-end solution will allow us to bring the highest quality of service to Tianjin’s customers"

In China, Alcatel is a leading NGN solutions provider for leading telecom operators, government organizations or enterprises. Prior to this project, Alcatel was selected by China Netcom to deploy a nationwide long-distance NGN trial network covering 31 provinces of China. Globally, more than 90 NGN projects have been undertaken by Alcatel to date including operators such as BT, Asia Pacific Telecom Group (Taiwan) and Telekom Austria.

Alcatel continues to strengthen its position as the operators’ partner of choice for IP network transformation, bringing to market best breed of products, proven solutions, and unmatched network and service integration capability. Worldwide, Alcatel is involved in more than 40 IP network and service transformation projects including those with AT&T, BT, Telstra and China Telecom. Alcatel’s IP portfolio has been selected by more than 130 service providers in 55 countries and is #2 in the Services Edge Router category in Q1 2006, with an 18% market share according to Synergy Research Group.

About China Netcom
A major state-owned enterprise, China Netcom Corporation Ltd. was co-established by the local telecom companies in 10 provinces, autonomous regions or municipalities directly under the central government, including Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Henan, Shandong, China Netcom (Holding) Co.,Ltd. Other corporations include South-eastern Communications Corp., China Network Communications (holding) Co.,Ltd. Jitong Communications Limited Liability Company and other holding and sharing holding companies. With fixed assets of more than 220 billion RMB, China Netcom Corporation Ltd provides a variety of domestic and international fixed telecom network services and facilities, including wireless local loop, telecom network-based voice, data, image and multimedia communications and information services, as well as corresponding system integration and technical development. It also promotes domestic and overseas investment and financing opportunities, as well as other operations approved by the state.

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

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Mark Burnworth

Corporate Media Relations

Alcatel

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