1. Alcatel-Lucent Optics Division
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2. 1. Introduction/Overview 2. Our Vision & Strategy
Agenda
1. Introduction/Overview
2. Our Vision & Strategy
3. Market Positioning
Solution Overview
Portfolio Overview
Customer Reference and Success Stories
Conclusion
Agenda Pages
This page allows for the listing of the sections within a presentation.

3. 1 Introduction/Overview Divider Section Break Pages
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4. Best technology  Best Product portfolio  Massive customer references
A Global Expertise, A Widespread Local Presence
Best technology  Best Product portfolio  Massive customer references
MORE THAN…
700 Customers in 150 Countries
540,000 ADMs
218,000 MSPPs
34,300 WDM Systems
12,300 Cross-Connects
461,500 Km Submarine Networks
One out of four optical transport equipment running in the market is from Alcatel-Lucent

5. Major Optics Business Customers
We have the industry’s 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

6. Locations Greenwich Shanghai Plano Chengdu Murray Hill, Holmdel
Vimercate,
Trieste,
Genoa
Paris, Calais
Westford
Stuttgart, Nuremberg

7. Organization Optics Romano Valussi Management Control A. Veggetti
Marketing
&
Communic.*
T. Goodwin
CTO
B. Nelson
Operations**
A. Sciarappa
Quality
& Customer
Satisfaction
R.Castelli (acting)
Human
Resources
S. Magni
OMSN
S. Schiavoni
Cross
Connects
S. Fasce
WDM
D. Scordo
Network
Release &
Products Cost
Improvement
R. Fechner
Submarine
J. Godeluck
NAR
D. Dixson
APAC
R. Lozono
E&S
S. Lorenzi
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
Support Center
Regional

8. 2
Our vision & strategy

9. More Value for Our Customers1
Alcatel-Lucent brings together the widest optical presence worldwide
We can serve you better everywhere 2
Alcatel-Lucent brings together the most comprehensive optical portfolio
We can better help you transform your network for the future 3
Alcatel-Lucent brings together the best of innovation and research in optics
We can deliver you richer optical networking solutions

10. Our Vision, Customer advantages
No-one is better positioned than Alcatel-Lucent to transform operators network, from any starting point, to the simplified, intelligent network of the future
Fast Bandwidth Growth
Cost Control
Content Sharing
Broadband Mobile
Triple Play
Optimized for data
Highly robust
Easy to manage
Smooth Migration to
All-packet Transport
The most successful optical vendor in the world
The best optical products
in the world
Leading the industry in standards and research for optical packet transport networks
1850 TSS: Light Reading Product of the Year
Portfolio trusted in the world’s biggest IP transformation projects
Twice the market share of nearest competitor
World leader in MSPP, optical switches and WDM
ITU-T editor for TMPLS
GFP/VCAT/LCAS innovator
Leading research in 100Gb

11. 3 Market Positioning Divider Section Break Pages
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12. The World Leader in Optical Network
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
Source: Dell’Oro

13. 4 Solutions Overview Divider Section Break Pages
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14. Solution Portfolio TMP (top marketing pg) Wireline BG 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
TMP (top marketing pg)
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 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)
Wireline BG Solutions
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
Optics Division Solutions
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

15. Optical Ethernet Services
Service-provider challenge
The solution
Value proposition
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
Deliver mission-critical business Ethernet services over Ethernet-enabled optical transport combining low-cost Ethernet with the resiliency and robustness of SONET/SDH
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
2004
2005
2006
2007
2009
5000
10000
15000
20000
E-LAN
E-LINE
$ Millions
Worldwide Enterprise Ethernet Services Revenue Forecast
2008
Source: Ovum-RHK 2006
IP/MPLS
Packet Transport
(GE/10GE/λ))
TSS
TSS
Ethernet over SONET/SDH
Hub MSPP
Access MSPP/CPE
Eth over Copper extensions
Some references

16. Triple Play over Optical Network
SP challenge
The solution
Value proposition
Video is creating unprecedented capacity demand in the Metro networks
Triple play backhauling using centralized (WDM) or distributed (MSPP, 1850TSS) aggregation solutions
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 6%
Private Lines
Voice
24%
50%
Video Distribution
Distributed
2005
Data Services
MSPP 1850TSS
BB Internet Access Residential
L2 aggregation close to the access sites 7% 3% 6x
10%
BB Internet Access SMEs 2%
11%
25%
Video
2008
Metro WDM
Centralized 4%
31%
Transparent transport up to the central site
27%
Some references

17. Optical Mobile Transport
MSP challenge
The solution
Value proposition
Sharp rise in bandwidth intensive services
Need to reduce the cost of transport to stay profitable
Optical transport for backhaul and core networks to efficiently handle rapid growth of data services
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 2G
Backhaul 3G
TDM grooming ATM, Eth aggregation
Capacity
WiMAX
TSS
IP/MPLS €
b/s
Revenue
Backbone
Switching site
MSC
SGSN 2G
2.5G 3G
HSPA
Switching site interconnect
Controller
Some references

18. Intelligent Optical Networks
SP challenge
The solution
Value proposition
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
An optimized combination of DWDM and OXC in a GMPLS environment with integrated management
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
UNI or E-NNI
OC-N STM-N
Customer Premises
Some references

19. 5 Portfolio Overview Divider Section Break Pages
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20. Data Capacity Feature richness
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
Key drivers
Convergence
Operational efficiency
Availability
Data Capacity Feature richness
Key drivers
Service assurance
Bandwidth optimization
Automation
Key drivers
Capacity
Performance
Reliability
Full-packet transport
Transparent photonics
NG-SONET/SDH
ION ROADM
SONET/SDH rings
DCS
WDM pt-to-pt
Slide shows increased requirement for capacity and data-features mapped over a vague timeline.
Three steps leading to the target network, and corresponding to the market conditions at each point
First implementations of ethernet over existing transmission networks
Todays MSPP / MSTP model
The future target network to match the previously explained requirements
< 2000
today
> 2010

21. 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

22. Photonic Portfolio at a Glance
1626 Light Manager - Multireach DWDM platform
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
Easy and fast installation and commissioning
1696 Metrospan - Mixed CWDM/DWDM platform for carrier-grade Metro networks
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
Traffic concentrators, colored plug-ins
1692 Metrospan Edge - Stand-alone CWDM system
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

23. Aggregation Portfolio - ETSI
1660 SM
1642 EM/EMC
Metro Regional STM-64, TDM, Ethernet, ATM, CWDM,
SHDSL, DVB-ASI
Metro CPE STM-1/4, TDM, Ethernet
1662 SMC
ISA Boards
Metro STM-16, TDM, Ethernet, ATM, CWDM,
SHDSL, DVB-ASI
Integrated Service Adapters Ethernet/MPLS switching, ATM switching, SHDSL, DVB-ASI
1650 SMC
AM/AMS
Metro Access STM-4, TDM, Ethernet, ATM, SHDSL, DVB-ASI
Metro CPE STM-1/4, TDM, Ethernet, SHDSL
Large installed base of 1678MCC and LambdaUnite
 Strategy
Both development programs through 2008, delivering a positive message to both portfolio's installed base
Evolution path for both equipment's = convergence towards the 1678MCC and the 1850TSS-640
1671SC development programs maintained through 2008, to address the ANSI wideband cross connect market
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

24. Aggregation Portfolio - ANSI
DMX
Industry’s 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 Core OC-3/12/48/192, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, TransMUX, DS1/DS3
DMXtend
Metro Access
OC-3/12/48, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, DS1/DS3
DMXplore
Metro CPE OC-3/12, 10/100 Ethernet, DS1/DS3

25. Maintained Products & ROADM
LambdaXtreme
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)
WSM
Continuing to support existing customers commitments
Co-existence with the 1696 Metrospan in the very near term for specific applications
Metro ROADM
We will continue to support existing customers commitments, products and requirements until decision on the long-term strategy is made
ADMs and SL
Fulfillment of existing customer commitments for future development
Analysis of new development requirements
Elaboration of customer evolution strategy
Emphasis on minimal customer disruptions and products co-existence, if necessary

26. 1850 Transport Service Switch (TSS) Global Next Generation Aggregation
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
1850 Transport Service Switch (TSS)
Ethernet/MPLS
TDM
WDM
3 separate platforms
1 purpose-built convergence platform
Universal Switching
Top market recognition
More than 30 customer contracts and lab trials worldwide
“Best New Product” Awards
MEF certification
Alcatel-Lucent is dominating the evolution of multiservice transport technology, and we have introduced last year on the market the next generation MSPP, the 1850TSS.
The 1850TSS solves the scalability issues encountered with the traditional MSPP when data traffic is increasing, as it can be support full-packet configurations.
To overcome this scalability issue, it is built around an innovative universal switch that can switch circuit and packets in their native format.
The 1850TSS can then play a key role in the migration to full packet transport, allowing a flexible mix of TDM, packets and WDM

27. Cross-Connect Portfolio
1678 MCC
LambdaUnite
1671 SC
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
240 G WB matrix (SONET)
GMPLS-ready
Packet switching (MPLS/Ethernet)
Narrow-band DS0 Groomer
Transmux
Wide range of SONET interfaces
Packet Switching
 Switch
Broadband
OCS
Wideband
DCS
Packet Switching
Broadband
OCS
Wideband
DCS
Narrowband

28. New developments and products
NMS Portfolio
Both OMS and 1350 MS continued support for all current products
Lucent equipment
still in the new
portfolio
LambdaUnite
DMX
AM/AMS
Lucent OMS
1350 MS + OMS
Alcatel-Lucent 1350 OMS
Alcatel equipment
still in the new
portfolio
OMSN
1850 TSS
1678 MCC
1626 LM
1696 MS
1692 MSE
No disruption in operations
Alcatel 1350 MS
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)
New developments and products

29. 6 Customer Reference and Success Stories Divider Section Break Pages
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30. 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
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
SDH2000+ NETWORK
Alcatel
Backbone Network
Lucent
Alcatel
Regional Networks
Lucent
12,000 NE
10,500 OMSN
300 Cross-Connects
440 DWDM
16,000 NE
15,200 SDH
540 Cross-Connects
270 DWDM

31. Mobile Backhaul Aggregation / Mobile Backbone Transport
Challenges
Reduce mobile backhaul leasing costs
Prepare national rollout of a 3G CDMA2000® 1xEV-DO mobile high-speed data network
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
Business Advantages
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

32. Sea-Me-We 4 – Submarine Optical Network
20,000 km, more than 32 times the initial capacity of the Sea-Me-We 3 system
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
Prime benefits: delivers a new Terabit cable supporting huge data growth, leased line and broadband services

33. 7 Conclusion Divider Section Break Pages
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34. 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