Alcatel awarded US dollar 24 million contract to upgrade ETL's nationwide network in Laos



Doubles the capacity of existing fixed and mobile telecommunication networks

Paris, August 16, 2004 - Alcatel (Paris: CGEP.PA and NYSE: ALA) announced today that it has been awarded a US dollar 24 million contract by Enterprise of Telecommunications Laos (ETL) to upgrade its nationwide telecom network. This project is the latest in a series that the two companies have undertaken and further strengthens Alcatel's leading position as a communications solution provider in Laos. The contract was won through Alcatel Shanghai Bell, Alcatel's flagship Chinese company.

Under the terms of the contract, Alcatel will provide ETL with end-to-end telecommunications solutions including fixed lines, switches, multi-standard GSM/GPRS/EDGE network elements and transmission components. Upon the completion of the project, ETL's fixed and mobile network capacity will double, enabling users to take advantage of telecommunication services across the country.

In the framework of a supply contract for a turnkey GSM network in Laos signed in 2000, Alcatel deployed its end-to-end Evolium™ solution. This multistandard platform designed for GSM/GPRS/EDGE and 3G/UMTS networks evolves constantly with the latest technological advances, allowing costs to be optimized. It enables ETL today to seamlessly upgrade its network capacities to evolve towards GPRS and EDGE while at the same time preserving and optimizing its initial investments.

Alcatel will also support the deployment of the Northern Laos segment of a 1000 km-long nation-wide optical backbone network to meet an increasing demand for high quality telecommunications services. The new infrastructure will use Alcatel's next-generation SDH Optical Multi-Service Node (OMSN) systems, including the Alcatel 1642 Edge Multiplexer and the Alcatel 1662 SMC.

These projects will secure Alcatel's position as the dominant telecommunications solutions provider in Laos with an 80% share of the country's fixed and mobile networks. They also reinforce Alcatel's leadership in providing mobile solutions for emerging markets. It is an achievement that illustrates Alcatel's capability to help its customers meet the growing demand for attractive new mobile services.

Padapphet Sayakhot, Managing Director of ETL, noted: "We are pleased to extend our close partnership with Alcatel through these new projects and look forward to a long term co-operation. Thanks to Alcatel's state-of-the-art solutions and excellent services, we have been able to meet rapid growth in demand for telecommunications services".

Gerard Dega, President of Alcatel Shanghai Bell, added: "This is a significant win for Alcatel in Laos because it demonstrates the strength of our partnership with ETL and is in line with our strategy of providing user-centric technologies and services. I believe Alcatel will continue to play a leading role in supporting the development of the telecommunications market in Laos."


About Enterprise of Telecommunications Laos
Enterprise of Telecommunications Laos (ETL), established on 31 August 2000, is a state enterprise whose assets and capital are held by the Ministry of Finance and whose operations are technically supervised by the Ministry of Communications, Transport, Post, and Construction. ETL has the full rights to conduct business in the area of telecommunications under an agreement with the government of the Lao PDR. Its role is to provide both domestic and international telecommunications services. The company's initial registered capital is 85,214,148,768 kip.

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 to their employees. Alcatel leverages its leading position in fixed and mobile broadband networks, applications and services to bring value to its customers in the framework of a broadband world. With sales of EURO 12.5 billion in 2003, Alcatel operates in more than 130 countries.

About Alcatel Shanghai Bell
Alcatel Shanghai Bell is the first foreign-invested company limited by shares in the telecommunications sector in China, with Alcatel holding 50%+1 shares and Chinese shareholders holding the remainder.The multi-billion dollar telecom technology leader delivers end-to-end telecommunications solutions and high-quality services, covering the fixed, mobile networking, broadband access, intelligent optical networking, multimedia solutions and network applications. It also has a key international R&D center with full access to Alcatel's global technology pool, developing original technology for use in China and export to Alcatel's customers worldwide. With 6,500 employees, an advanced manufacturing center, and the most extensive sales and support network in China, it is the only company capable of meeting the global needs of Chinese customers. For more information, visit Alcatel Shanghai Bell on the Internet at http://www.alcatel-sbell.com.cn

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