February 12, 2003
Alcatel Raises the Bar with Enhanced Metro Ethernet over SDH Capabilities
Native Networks enlisted to accelerate offering of expanded Metro Ethernet services

Paris, February 12, 2003 – Alcatel (Paris: CGEP.PA and NYSE: ALA), the world leader in optical networking, today announced it is partnering with Native Networks to speed up the introduction of more sophisticated Metro Ethernet over Synchronous Digital Hierarchy (SDH) features into Alcatel’s next-generation, data-aware Optical Multi-Service Nodes (OMSN). Augmenting today’s point-to-point Ethernet transport capabilities, Alcatel is leveraging Native Networks’ Metro Ethernet technology to introduce enhanced transport and aggregation of Ethernet, Fast Ethernet, and Gigabit Ethernet services, along with Packet Ring functionality.

The enhanced managed Ethernet features can be introduced incrementally through a simple add-on card to existing OMSN networks or equipped as needed in new installations. This approach permits an operator to roll out enhanced Ethernet services only where justified by business conditions. As an added benefit, by teaming the quality and reliability of SDH with the efficiency of Metro Ethernet aggregation, the operator can deliver a robust, carrier class solution. Operators and service providers will be able to expand beyond simple point-to-point Ethernet to offer more sophisticated multi-point services, such as Virtual Private LAN Services (VPLS), without negatively impacting existing voice and leased-line services.

“The integration of our technology enables Alcatel to leverage Native Networks Metro Ethernet solutions” said Rami Hadar, CEO of Native Networks.” The combination of Alcatel’s market leading next generation SDH systems with Native Networks’ core competency and technology, enables us to accelerate the adoption of advanced Ethernet Services through the confluence of Metro Ethernet and SDH.”

“The business case for Ethernet over SDH is well understood by today’s operators and service providers, and this enhanced functionality will permit our customers to incrementally upgrade the value of Ethernet services they are offering,“ stated Jean-Marie Vansteenkiste, President of Alcatel’s optical networks activities. “These enhancements strengthen the OMSN value proposition and reinforces our leading position in the next-generation, multi-service SDH market.”

The success of the OMSN product range is a testimony to Alcatel’s ability to deliver next-generation SDH products with the right combination of TDM and data features demanded by the market. Since their introduction, Alcatel has shipped more than 50,000 OMSNs and remains the world leader in the introduction of managed data services over next-generation SDH equipment.

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About Alcatel’s Optical Multi-Service Nodes (OMSNs)
Designed for both metro and core applications, Alcatel's Optical Multi-Service Nodes provide world-class next-generation SDH functionality and capacity through aggregation of broadband multi-protocol traffic patterns. Their deployment allows operators of optical transport networks to achieve the optimal balance between new competitive service offerings and traditional revenue-generating services by introducing a wide variety of data managed services - including top-level differentiated QoS capabilities, variable service rates and traffic congestion management. Supporting STM-4c, STM-16c and STM-64c concatenated payloads, OMSNs deliver integrated ATM and Packet Ring/MPLS switching, as well as LAN interfaces (Ethernet, Fast Ethernet and Gigabit Ethernet) by integrating ISA plug-in modules. Although configurable as ADMs (Add-Drop-Multiplexers), OMSNs have full cross-connect capability thanks to their symmetrical and scalable architecture. OMSNs are flexible for use in all network topologies - i.e.: point-to-point, linear chains, multiple rings, meshed networks - and ensure complete synergistic use of hardware items across the systems, from common parts to traffic ports. Additionally, they all have fully non-blocking SDH matrices (HO/LO) and support all standard PDH interfaces.

About Packet Ring
Packet Ring (PR) is an emerging technology that uses statistical muxing techniques to help SDH/SONET more efficiently transport bursty data protocols such as Ethernet. With limited and incremental investments, PR enables operators to optimize the bandwidth usage of newly deployed and already installed metro SDH/SONET networks, thus increasing the number of the Ethernet end-users they can serve. Additionally, PR offers a carrier grade QoS for guaranteed traffic and fast packet based protection, like legacy SDH/SONET networks.

About Alcatel
According to leading telecom market research firm RHK, Alcatel was the 2001 world leader in global optical transport – encompassing terrestrial and submarine applications – with 17% market share, in terrestrial optical transport with 14.2% market share and in submarine optical transport with 41% market share, an unprecedented achievement in the telecom industry. Alcatel’s optics business comprises optical components, optical fibers, SDH/SONET and DWDM systems, cross-connects, microwave radio links, network intelligence, and services for both terrestrial and submarine applications.

Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer, anywhere in the world. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of EURO 25 billion, Alcatel operates in more than 130 countries. For more information, visit Alcatel on the Internet: http://www.alcatel.com

About Native Networks

Native Networks, the Metro Ethernet Access Company, provides innovative solutions which enable carriers to offer differentiated Metro Ethernet services, more flexibly and efficiently over existing and planned infrastructure. These advanced carrier-class connectivity solutions, designed for deployment in "first-mile" metro access infrastructure, transport and aggregate Metro Ethernet packets alongside legacy circuits/TDM services in their “Native” form over dark fiber, existing SDH/SONET infrastructure or DWDM, in a transition-friendly solution. They enable carriers and service providers to increase differentiation and profitability by delivering a service bundle, which includes advanced layer-2 Metro Ethernet services such as Virtual Private LAN Service (VPLS). The technology is founded on an advanced, patent-pending multiplexing scheme and unique traffic management technology to provide optimal use of optical or SDH/SONET infrastructure with guaranteed QoS per customer and the ability to engineer to strict SLAs. Native Networks has developed a unique family of intelligent, data aware Metro Ethernet plus SDH/SONET transport solutions, including Add/Drop statistical Multiplexers (ADsM), Dense Service Aggregation nodes and CPE/CLE access devices.
Founded in 1999, Native Networks is funded by several North American and European venture capital funds. The company is headquartered in Maidenhead, UK and retains extensive research and development facilities in Petah Tikva, Israel.
Further information about Native Networks can be found at http://www.nativenetworks.com/

Alcatel Press Contacts
Willem Zevenbergen / HQ Tel : +33 (0)1 40 76 11 38 Willem.zevenbergen@alcatel.fr

Melina Georgitsis Tel: +33 (0)1 64 49 26 95 melina.georgitsis@alcatel.fr

Alcatel Investor Relations
Claire Pedini Tel : +33 (0)1 40 76 13 93 claire.pedini@alcatel.com

Laurent Geoffroy Tel : +33 (0)1 40 76 50 27 Laurent.geoffroy@alcatel.com

Pascal Bantegnie Tel : +33 (0)1 40 76 52 20 Pascal.bantegnie@alcatel.com

Peter Campbell Tel : 1 972 519 4347 Peter.campbell@alcatel.com

Charlotte Laurent-Ottomane Tel : 1 703 668 3571 charlotte.laurent-ottomane@alcatel.com

Native Networks Press Contacts
Gemma Thomas - Multimedia PR & Marketing Tel : +44 (0)20 7470 8777 gemmat@multimediapr.co.uk

Colin Evans – Native Networks
Tel : +44 (0)1628 421707 colin.evans@nativenetworks.com

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