1. All rights reserved © 2006, Alcatel About Innovation in Telecoms Olivier Baujard, Chief Technology Officer Politecnico di Milano – May 10 th 2006

2. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 2 Alcatel A global player in communication solutions 2005 Sales at 13.1 billion Operating profit at 1,189 million Net income at 930 million in billion Mobile communications 4 Mobile communications 4 Private communications 3.9 Private communications 3.9 Fixed communications 5.2 Fixed communications 5.2 41% North America Asia Pacific Asia Pacific Western Europe Western Europe RoW 30% 15% 14% 58,000 employees active in 130 countries

3. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 3 16,000+ R&D engineers 21 major development centers 1.5 Bn 2005 R&D Investment 10,000 patents granted and 8,000 patent applications worldwide 700 patents filed every year 300 experts in 100 standard bodies France Germany Belgium Italy CIS Canada USA China India Australia R&D Priority to a WW innovative presence

4. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 4 Innovative eco-systems and clusters at the heart of Alcatels research European Programs FP6 / FP7 / Eureka Technology Platforms : NEM, eMobility, ARTEMIS,… National agencies France, Germany, Belgium, Italia, US, China French competitive clusters Academic partnerships : 100+ collaborations A worldwide research partnership program with best-in-class scientific institutions Customers Partnership Innovative SMEs ICT industry leaders Service providers Academics

5. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 5 A powerful portfolio Access Optics IP Mobile Enterprise Satellites Rail signaling ADSL FTTX WiMAX Terrestrial Submarin e ETCS Core NGN Applications Edge service router Ethernet aggregation Observation, science civilian & military telecoms IP telephony Call centers World leader At the forefront World leader Growing momentum Leade r Among the top 2 or 3 in the world World leader Among the top 2 or 3 in the world

6. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 6 Recent innovation breakthroughs Worlds 1 st IP broadband access portfolio for interactive Triple Play @ 20+ Mbit/s to ALL subscribers! Evolium A9100 MBS Worlds most efficient power saving multi-standard BTS Best Product Award : 1st Metro Networking platform to offer a 100% flexible mix of Ethernet, TDM and WDM. Amigo TV : rich communications between TV viewers My Own TV : Community Distribution on TV of Personal Content IPTV Alcatel 1850 TSS 1 st to demonstrate industrial viability of 40 Gbit/s systems for submarine distance with WDM transmission of 11,220 km! Optics Intelligent Services Access Manager Alcatel 7750 family # 2 and fastest growing player in IP aggregation thanks to innovative service edge routing solution

7. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 7 Innovation and new usage drivers Next Billion More content Sensor network Wireless Myriad of applications Internet of Things Telecoms Wireless NGN/IMS Cost Broadband Interactive rich media Personalized content Fixed/Mobile Convergence Broadband for all Service bundles Unlimited Consumption

8. All rights reserved © 2006, Alcatel Politecnico di Milano, May 10th 2006 Page 8 Service Management & Operation Home network management Profile / preference End-to-end provisioning / fault management Applications & Platforms Interactive Multimedia Location / Presence / Authentication Context based payment Fixed / Mobile TV Web services & orchestration Terminals enrichment Dual-mode Multi-service / Multi-carrier Video / Mobile TV Key enablers for the next wave of innovation Network cost/performance Beyond DSL access Beyond 3G : WiMAX / RFID/4G… Meshed networking Low cost & flexible optics NGN / IMS platforms and beyond IP @ Optics Intelligence in the networks Deep Packet Inspection Content sensitive priority / quality Content cacheing Home Networking Residential gateway STB on chip ONUs / ONTs In-home coverage Security & Privacy Network security, privacy DRM, Local storage

9. Molte Grazie! All rights reserved © 2005, Alcatel www.alcatel.com