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All Rights Reserved © Alcatel-Lucent 2006, ##### Alcatel-Lucent Optics Division
All Rights Reserved © Alcatel-Lucent 2007 2 | Alcatel-Lucent Optics Presentation| February 2007 Agenda 1.Introduction/Overview 2.Our Vision & Strategy 3. Market Positioning 4.Solution Overview 5.Portfolio Overview 6.Customer Reference and Success Stories 7.Conclusion
All Rights Reserved © Alcatel-Lucent 2007 3 | Alcatel-Lucent Optics Presentation| February 2007 1 Introduction/Overview
All Rights Reserved © Alcatel-Lucent 2007 4 | Alcatel-Lucent Optics Presentation| February 2007 A Global Expertise, A Widespread Local Presence MORE THAN… 700 Customers in 150 Countries Best technology Best Product portfolio Massive customer references 218,000 MSPPs 12,300 Cross-Connects 461,500 Km Submarine Networks 34,300 WDM Systems 540,000 ADMs One out of four optical transport equipment running in the market is from Alcatel-Lucent
All Rights Reserved © Alcatel-Lucent 2007 5 | Alcatel-Lucent Optics Presentation| February 2007 Major Optics Business Customers We have the industrys strongest, most diversified customer base with many opportunities to up-sell into respective customer bases. We are THE ONLY SUPPLIER with the scale, innovation and end-to-end optics solutions to effectively support and partner with the converged global carriers. APAC EMAI NA LATAM
All Rights Reserved © Alcatel-Lucent 2007 6 | Alcatel-Lucent Optics Presentation| February 2007 Locations Paris, Calais Stuttgart, Nuremberg Vimercate, Trieste, Genoa Vimercate, Trieste, Genoa Westford Murray Hill, Holmdel Chengdu Plano Greenwich Shanghai
All Rights Reserved © Alcatel-Lucent 2007 7 | Alcatel-Lucent Optics Presentation| February 2007 Organization Optics Romano Valussi Optics Romano Valussi Management Control A. Veggetti Management Control A. Veggetti Marketing & Communic.* T. Goodwin Marketing & Communic.* T. Goodwin CTO B. Nelson CTO B. Nelson Operations** A. Sciarappa Operations** A. Sciarappa Quality & Customer Satisfaction R.Castelli (acting) Quality & Customer Satisfaction R.Castelli (acting) Human Resources S. Magni Human Resources S. Magni OMSN S. Schiavoni OMSN S. Schiavoni Cross Connects S. Fasce Cross Connects S. Fasce WDM D. Scordo WDM D. Scordo Network Release & Products Cost Improvement R. Fechner Network Release & Products Cost Improvement R. Fechner Submarine J. Godeluck Submarine J. Godeluck NAR D. Dixson NAR D. Dixson APAC R. Lozono APAC R. Lozono E&S S. Lorenzi E&S S. Lorenzi E&N S. McCaffery E&N S. McCaffery *Direct reporting to Business Group Communications for communications responsibilities **Direct reporting to Global Industrial & Logistics for industrial logistics responsibilities Business Unit Central Functions Product Groups Business Unit Regional Support Center
All Rights Reserved © Alcatel-Lucent 2007 8 | Alcatel-Lucent Optics Presentation| February 2007 2 Our vision & strategy
All Rights Reserved © Alcatel-Lucent 2007 9 | Alcatel-Lucent Optics Presentation| February 2007 More Value for Our Customers 1 We can serve you better everywhere 2 We can deliver you richer optical networking solutions 3 We can better help you transform your network for the future Alcatel-Lucent brings together the widest optical presence worldwide Alcatel-Lucent brings together the most comprehensive optical portfolio Alcatel-Lucent brings together the best of innovation and research in optics
All Rights Reserved © Alcatel-Lucent 2007 10 | Alcatel-Lucent Optics Presentation| February 2007 Our Vision, Customer advantages Content Sharing Broadband Mobile Triple Play Fast Bandwidth Growth Optimized for data Highly robust Easy to manage Cost Control Smooth Migration to All-packet Transport ITU-T editor for TMPLS GFP/VCAT/LCAS innovator Leading research in 100Gb 1850 TSS: Light Reading Product of the Year Portfolio trusted in the worlds biggest IP transformation projects Twice the market share of nearest competitor World leader in MSPP, optical switches and WDM No-one is better positioned than Alcatel-Lucent to transform operators network, from any starting point, to the simplified, intelligent network of the future Leading the industry in standards and research for optical packet transport networks The best optical products in the world The most successful optical vendor in the world
All Rights Reserved © Alcatel-Lucent 2007 11 | Alcatel-Lucent Optics Presentation| February 2007 3 Market Positioning
All Rights Reserved © Alcatel-Lucent 2007 12 | Alcatel-Lucent Optics Presentation| February 2007 The World Leader in Optical Network Source: DellOro Alcatel-Lucent over U.S. $2 billion in optical More than double next nearest competitor (Nortel) 2.5 times Huawei Share leader in 4 of 5 product segments
All Rights Reserved © Alcatel-Lucent 2007 13 | Alcatel-Lucent Optics Presentation| February 2007 4 Solutions Overview
All Rights Reserved © Alcatel-Lucent 2007 14 | Alcatel-Lucent Optics Presentation| February 2007 Solution Portfolio TMP (top marketing pg) Wireline BG Solutions Optics Division Solutions Alcatel-Lucent is leading the transformation of the transport layer toward packets with innovative technology Network Transformation Network transformation is needed to serve the service revolution Alcatel-Lucent solution enables real-time workflows and efficiencies through unprecedented high level of network availability and reliability Mission-Critical Communication Integrated end-to-end security and safety solutions for the vertical market Alcatel-Lucent is massively deploying optical networks to answer the huge capacity demand created by video services Triple Play End-to-end reference architecture and complete solution for designing and developing triple play Alcatel-Lucent has already successfully deployed Ethernet business connectivity over optical networks to avoid costly overlays Optical Ethernet Networking solutions for the new wave of on- demand applications used by enterprises An optimized combination of DWDM and OXC in a GMPLS environment with integrated management to reduce TCO Intelligent Optical Networks End-to-end reference architecture and complete solution for designing and developing triple play Alcatel-Lucent can efficiently help MSPs reduce their cost of transport for the new wave of mobile multimedia services Mobile Transport Backhauling and transport of mobile services over any medium (copper, air, fiber)
All Rights Reserved © Alcatel-Lucent 2007 15 | Alcatel-Lucent Optics Presentation| February 2007 Optical Ethernet Services Deliver mission-critical business Ethernet services over Ethernet- enabled optical transport combining low-cost Ethernet with the resiliency and robustness of SONET/SDH Service-provider challenge Satisfy strong demand for E-LINE and E-LAN business services worldwide Provide scalable, resilient point- to-point and multipoint Ethernet services backed by strict SLAs Economically adds Ethernet to large installed base of SONET/SDH Global reach: deploy metro, national and international Ethernet services Multiservice: all existing SONET/SDH features and support of legacy I/Os Carrier-class features applied to Ethernet (SONET/SDH OAM&P, reliability and management) Integration of Ethernet switching improves bandwidth efficiency Access MSPP/CPE Hub MSPP Ethernet over SONET/SDH Eth over Copper extensions IP/MPLS 20042005200620072009 5000 10000 15000 20000 E-LAN E-LINE $ Millions 0 Worldwide Enterprise Ethernet Services Revenue Forecast 2008 Source: Ovum-RHK 2006 Packet Transport (GE/10GE/λ)) TSS The solutionValue proposition Some references
All Rights Reserved © Alcatel-Lucent 2007 16 | Alcatel-Lucent Optics Presentation| February 2007 Triple Play over Optical Network Triple play backhauling using centralized (WDM) or distributed (MSPP, 1850TSS) aggregation solutions SP challenge Video is creating unprecedented capacity demand in the Metro networks Carrier-grade Assured service availability and reliability Operational efficiency with fast provisioning and reduced troubleshooting Support of unicast, multicast (IGMP) and broadcast traffic Widely deployed solutions For fixed op., cable op. and TV broadcasters WDM or SONET/SDH More than 30 major deployment so far The solutionValue proposition Some references 6x Private Lines Voice Video Distribution BB Internet Access SMEs BB Internet Access Residential Data Services Centralized Distributed Metro WDM MSPP 1850TSS L2 aggregation close to the access sites Transparent transport up to the central site 50% 10% 3% 7% 24% 6% 2005 25% 27% 2% 11% 4% 2008 31% Video
All Rights Reserved © Alcatel-Lucent 2007 17 | Alcatel-Lucent Optics Presentation| February 2007 Optical Mobile Transport Switching site Switching site interconnect 2G 2.5G3GHSPA Optical transport for backhaul and core networks to efficiently handle rapid growth of data services MSP challenge Sharp rise in bandwidth intensive services Need to reduce the cost of transport to stay profitable Leading portfolio, strong expertise in mobile market Reference with major MSP all around the world Clear migration path towards packets Ethernet already supported today in MSPPs and WDM Unique migration scenario to full packet with 1850TSS The solutionValue proposition Some references Revenue Capacity b/s WiMAX 2G 3G TDM grooming ATM, Eth aggregation Backhaul Backbone IP/MPLS MSC SGSN Controller TSS
All Rights Reserved © Alcatel-Lucent 2007 18 | Alcatel-Lucent Optics Presentation| February 2007 Intelligent Optical Networks An optimized combination of DWDM and OXC in a GMPLS environment with integrated management SP challenge Operators seek to extend the performance and improve the efficiency of their existing networks, minimize operating costs, and add new capabilities to meet customer demands without making major capital investments Intrinsic awareness of network resources, i.e. topology, network inventory improves resource allocation Simplifies provisioning and speeds provisioning cycle Enables service activation with service aware resource management and QoS to maintain end-end SLAs Improves Multi-Vendor Interworking via E-NNI Dynamic bandwidth management helps pave the way for new services – such as Ethernet-on-demand The solutionValue proposition Some references OC-N STM-N UNI or E-NNI Customer Premises
All Rights Reserved © Alcatel-Lucent 2007 19 | Alcatel-Lucent Optics Presentation| February 2007 5 Portfolio Overview
All Rights Reserved © Alcatel-Lucent 2007 20 | Alcatel-Lucent Optics Presentation| February 2007 Portfolio Strategy Alcatel-Lucent optics portfolio fits inside the long-term vision of all-packets transport Scalable multiservice platforms enabling optimized transport of data Evolution path towards full packet and transparent photonic networks Data Capacity Feature richness SONET/SDH rings DCS WDM pt-to-pt < 2000> 2010 Key drivers Capacity Performance Reliability Key drivers Service assurance Bandwidth optimization Automation Key drivers Convergence Operational efficiency Availability NG-SONET/SDH ION ROADM Full-packet transport Transparent photonics today
All Rights Reserved © Alcatel-Lucent 2007 21 | Alcatel-Lucent Optics Presentation| February 2007 Transition Strategy & Customer Support The Alcatel-Lucent product portfolio fits inside the long-term vision of all-packet transport Scalable multiservice platforms enabling optimized transport of data Evolution path towards full packet The Alcatel-Lucent product portfolio will transition considering The synergies and overlap between the Alcatel and Lucent products The installed base The current customer commitments The forecasts for each product The market demand The best, continued support to our existing customers – minimizing disruptions and allowing co-existence, if necessary Fulfillment of existing customer commitments for feature development Analysis of new development requirements Elaboration of customer evolution strategy
All Rights Reserved © Alcatel-Lucent 2007 22 | Alcatel-Lucent Optics Presentation| February 2007 Photonic Portfolio at a Glance 96 wavelength at 10 Gb/s, upgradable to 192 channels Optimized configurations from regional to pan-continental networks Leading-edge technology ROADM, 40 G, G.709 support Best-in-class footprint and power consumption Combined 8-wavelength CWDM/32-wavelength DWDM system in one platform Modular platform Compact or Central Office shelf Best-in-class footprint and power consumption 8-wavelength CWDM system, ready for 16 wavelength Carrier-grade platform with low cost technology High performance Abundant protection options Best-in-class footprint and power consumption Traffic concentrators, colored plug-ins Highly successful platforms : > 50 customers in LH WDM, > 100 customers in Metro WDM Easy and fast installation and commissioning Traffic concentrators, colored plug-ins 1626 Light Manager - Multireach DWDM platform 1696 Metrospan - Mixed CWDM/DWDM platform for carrier-grade Metro networks 1692 Metrospan Edge - Stand-alone CWDM system
All Rights Reserved © Alcatel-Lucent 2007 23 | Alcatel-Lucent Optics Presentation| February 2007 Aggregation Portfolio - ETSI Metro CPE STM-1/4, TDM, Ethernet Metro Access STM-4, TDM, Ethernet, ATM, SHDSL, DVB-ASI Metro STM-16, TDM, Ethernet, ATM, CWDM, SHDSL, DVB-ASI 1650 SMC 1660 SM 1662 SMC 1642 EM/EMC Metro Regional STM-64, TDM, Ethernet, ATM, CWDM, SHDSL, DVB-ASI Metro CPE STM-1/4, TDM, Ethernet, SHDSL AM/AMS Integrated Service Adapters Ethernet/MPLS switching, ATM switching, SHDSL, DVB-ASI ISA Boards The first MSPPs on the market, and by far the best-selling in the ETSI world The widest variety of service interfaces for any data service
All Rights Reserved © Alcatel-Lucent 2007 24 | Alcatel-Lucent Optics Presentation| February 2007 Aggregation Portfolio - ANSI Metro Access OC-3/12/48, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, DS1/DS3 Metro Core OC-3/12/48/192, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, TransMUX, DS1/DS3 Industrys First Standards-based GFP and VCAT deployment Standards-based RPR deployment Standards-based FCBB3 for storage area networking (SAN) distance extension Mine new revenue opportunities TDM, Ethernet, RPR, SAN on same platform Metro CPE OC-3/12, 10/100 Ethernet, DS1/DS3 DMXplore DMXtend DMX
All Rights Reserved © Alcatel-Lucent 2007 25 | Alcatel-Lucent Optics Presentation| February 2007 Maintained Products & ROADM Continuing to support existing customers with ultra long-haul networks over 2,600 km Very specialized networks Very high-capacities over very long spans (up to 4,000 km) Continuing to support existing customers commitments Co-existence with the 1696 Metrospan in the very near term for specific applications LambdaXtreme ADMs and 167 7 SL Fulfillment of existing customer commitments for future development Analysis of new development requirements Elaboration of customer evolution strategy WSM Metro ROADM We will continue to support existing customers commitments, products and requirements until decision on the long-term strategy is made Emphasis on minimal customer disruptions and products co-existence, if necessary
All Rights Reserved © Alcatel-Lucent 2007 26 | Alcatel-Lucent Optics Presentation| February 2007 Multiservice optical platform purpose- designed for all-packet transport Unique, innovative universal switch Fully scalable Ethernet/MPLS, SONET/SDH and WDM mix in one box Enhanced by UPM development IP transformation enabler Smooth transition from TDM to all-IP packet transport Full 100% packet configurations supported Secure investment Start anywhere, get anywhere to match any transport need today and in future Freedom in planning transport network resources Interoperable with Alcatel and Lucent SDH networks Top market recognition More than 30 customer contracts and lab trials worldwide Best New Product Awards MEF certification 1850 Transport Service Switch (TSS) 1850 Transport Service Switch (TSS) Global Next Generation Aggregation Ethernet/MPLS TDM WDM 3 separate platforms 1 purpose-built convergence platform Universal Switching
All Rights Reserved © Alcatel-Lucent 2007 27 | Alcatel-Lucent Optics Presentation| February 2007 Cross-Connect Portfolio 1678 MCCLambdaUnite1671 SC Packet Switching Broadband OCS Broadband OCS Wideband DCS Wideband DCS Narrowband DCS Narrowband DCS Packet Switching Switch Broadband OCS Broadband OCS Wideband DCS Wideband DCS Packet Switching Switch Broadband OCS Broadband OCS Wideband DCS Wideband DCS 640 G capacity in half-rack 160 G to 640 G switch capacity ASON/GMPLS control plane Optical transport network (OTN) Scalability to 2.5T Layer 2 aggregation Market-leading OXC 160 G to 640 G switch capacity ASON/GMPLS control plane Scalable to 1.3T ASON/GMPLS control plane 240 G WB matrix (SONET) GMPLS-ready Packet switching (MPLS/Ethernet) Narrow-band DS0 Groomer Transmux Wide range of SONET interfaces
All Rights Reserved © Alcatel-Lucent 2007 28 | Alcatel-Lucent Optics Presentation| February 2007 NMS Portfolio Alcatel 1350 MS Lucent OMS Alcatel-Lucent 1350 OMS New developments and products 1350 MS + OMS Compatible with the way networks are operated today with 1350 MS and 1350 OMS Evolution from installed base Interoperable with Wireline NMS portfolio (access and IP) No disruption in operations Both OMS and 1350 MS continued support for all current products Alcatel equipment still in the new portfolio OMSN 1850 TSS 1678 MCC 1626 LM 1696 MS 1692 MSE Lucent equipment still in the new portfolio LambdaUnite DMX AM/AMS
All Rights Reserved © Alcatel-Lucent 2007 29 | Alcatel-Lucent Optics Presentation| February 2007 6 Customer Reference and Success Stories
All Rights Reserved © Alcatel-Lucent 2007 30 | Alcatel-Lucent Optics Presentation| February 2007 Deutsche Telekom – SDH2000+ Infrastructure based on Alcatel and Lucent DWDM and SDH 14 single-vendor regional and 2 backbone networks The challenge Centralized configuration and fault management across multiple domains in a multi-vendor and multi-technology environment The solution: OneVision® Centralized end-to-end solution for managing transport network 28 000 NE under management 720,000 monitored SDH paths The benefits Faster provisioning of services Simplification of operational workflow Rapid fault localization Optimization of network utilization Alcatel Lucent Alcatel Regional Networks Lucent Backbone Network 12,000 NE 10,500 OMSN 300 Cross-Connects 440 DWDM 16,000 NE 15,200 SDH 540 Cross-Connects 270 DWDM SDH2000+ NETWORK
All Rights Reserved © Alcatel-Lucent 2007 31 | Alcatel-Lucent Optics Presentation| February 2007 Mobile Backhaul Aggregation / Mobile Backbone Transport Reduce mobile backhaul leasing costs Prepare national rollout of a 3G CDMA2000® 1xEV-DO mobile high-speed data network Business Advantages Challenges Solution LambdaUnite MSS and Metropolis DMX Avoid expense of leasing fiber and facilities from other companies Add the capacity and reliability for high speed data network Prepares network for Ethernet enabled BTS equipment Adds transport flexibility and increased capacity Supports broadband and wideband grooming functionality to efficiently aggregate traffic DS1/DS3/OC-3/12/Ethernet support Traffic Grooming (3/1 Cross Connect) Cost effective Small footprint
All Rights Reserved © Alcatel-Lucent 2007 32 | Alcatel-Lucent Optics Presentation| February 2007 Sea-Me-We 4 – Submarine Optical Network Links 14 countries from France to Singapore 16 landing points Alcatel products 1620 LM 1626 LM 1678 MCC 1350 management suite Comprehensive set of services Marine and terrestrial installation commissioning and integration 1620 Light Manager Submarine Line Terminal Equipment (SLTE) Designed for high-capacity repeatered submarine cable systems 192 x 10 Gbit/s channels 20,000 km, more than 32 times the initial capacity of the Sea-Me-We 3 system Prime benefits: delivers a new Terabit cable supporting huge data growth, leased line and broadband services
All Rights Reserved © Alcatel-Lucent 2007 33 | Alcatel-Lucent Optics Presentation| February 2007 7 Conclusion
All Rights Reserved © Alcatel-Lucent 2007 34 | Alcatel-Lucent Optics Presentation| February 2007 Conclusion Optical networks are under transformation IP bandwidth growth fuelling Photonic and Packet Transport Alcatel-Lucent is the strategic partner A strengthened position in every geographic segment The very best portfolio in the industry A cutting-edge innovation with roots in the best world research labs Experience of major IP network transformation projects
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