1. All rights reserved © 2005, AlcatelSept, 2005 User-Centric Broadband Vision - How to enhance & develop Information Society  Séminaire FRATEL & ARCEP – Paris, Septembre 2005  Olivier Gordien – Deputy Marketing Director

2. All rights reserved © 2005, AlcatelSept, 2005 Page 2 Key market drivers T he world is going BROADBAND Nearly 123M global broadband access customers DSL Forum, Sept. 2004 T he demand for USER-CENTRIC SERVICES “Customers want to be at the center of their communications universe; whatever they want, wherever they want, whenever they want” IDC 2004 C ustomers looking for a TRUSTED PARTNER to help guide them through the major transitions they are facing

3. All rights reserved © 2005, AlcatelSept, 2005 Page 3 The telecommunications market evolution: 3 waves of services Broadband Services Broadband Services User-Centric Broadband Services User-Centric Broadband Services Multiple new Connectivity Services Multiple new Connectivity Services Mobile Voice LAN Internet… Fixed BB (DSL) Wireless BB (Wi- Fi) Mobile BB (3G)… Any device, any connectivity Single subscription & Authentication Consistent personalization Transparent synchronization Many new services... … but a fragmented use New Services Adoption Evolution of the End-User World

4. All rights reserved © 2005, AlcatelSept, 2005 Page 4 Broadband Enhanced Services Market Corporate market pushed by IP PBX adoption and IP VPN deployment Consumer market pushed by need for triple play (voice, data, video) to increase ARPU and compensate cannibalization Multimedia services including VoIP will drive network infrastructure evolution Application platforms must allow smooth migration and co- existence between PSTN and NGN

5. All rights reserved © 2005, AlcatelSept, 2005 Page 5 Real Triple Play in an IP/DSL world Data/PCVideo/TV Voice/Phone TV-InternetPhoto-sharingTelevoting TV Videophony Calling line on TV Web access supplementary services Breakout services (PC – Phone) Dual WiFi/GSM handhelds Broadcast TV Video on Demand Pay Per View Electronic Program Guide Multiple VoIP lines Conferencing High speed internet access E-mailPeer-to-peer PC gaming Chat AmigoTV: virtual living room Live video-feed in TV-show 1 + 1 + 1 = 7

6. All rights reserved © 2005, AlcatelSept, 2005 Page 6 Alcatel User-Centric Broadband Architecture Universal Broadband Access Wireline Wireless Satellite Mobile Service Delivery Platform Service Aware Edge & Data Aware Transport Business Environment Any Content Every Terminal, Everywhere Each User Consumer Environment Integration & Operations Operations & Business Support Systems

7. All rights reserved © 2005, AlcatelSept, 2005 Page 7 Universal Broadband A Multidimensional World Critical Factors for Universal Broadband Access 1. Addressing Multiple User Markets 2. Delivering Multiple Services 3. By Reaching multiple Locations / Geographies 4. Using Multiple Technologies Service Delivery Platform Service Delivery Platform Service Aware Edge & Data Aware Transport Service Aware Edge & Data Aware Transport Universal BB Access Enterprise Infrastructure & Applications Any Terminal Consumer Environment Consumer Environment OSS and BSS Content Wireless Wireline Mobile

8. All rights reserved © 2005, AlcatelSept, 2005 Page 8 ADSL, ADSL2plus Fiber GSM/GPRS Mobility Bandwidth Cable EDGE DVB-S Satellite UMTS HSDPA WLAN 802.11 TD-SCDMA TDD WiMAX 802.16 CDMA2000 1X CDMA2000 EV-DO CDMA2000 EV-DV VDSL Dial-up DVB-S2 Satellite Universal Broadband Access Technology is Evolving towards Higher Bandwidth Technology evolution to higher bandwidths provides more flexibility and benefits

9. All rights reserved © 2005, AlcatelSept, 2005 Page 9 Loop lengths & new services impose Deep Fiber  Current deployment is optimized for HSI up to 1.5 Mbps ADSL or SHDSL >15 Kft CO or CSA  IPTV/Triple Play impacts network architecture Bandwidth ~15-25 Mbps Reach < 4-5 Kft Requires VDSL or ADSL2+ bonded. Where in the network ? 100 IPTV/Triple Play HSI PON % subs from CO - LAM 13%53%77%97%

10. All rights reserved © 2005, AlcatelSept, 2005 Page 10 Complementary Broadband Access technologies FTTArea FTTCabinet/campus FTTCurb/MDU FTTHome/apartment Backbone CO Existing Copper X-connect New Location for Electronics Buildings / MDUs Homes Curb / MDU basement Apartments Satellite FTTx Wireless FTTN

11. All rights reserved © 2005, AlcatelSept, 2005 Page 11 Remote DSLAM Aggregation CO DSLAM (> 100 subs. / site – >20 Mbits/user) 2 Way SAT x < 5 km Wireless / WIMAX x x WLAN (SAT) < 5 km < 15 km (100>x>20 subs./site - 1;5 Mbits/user) (< 20 subs./site – 8 Mbits/user) (20<x< 50 subs./site - 1;5 Mbits/user) Accessing remote & rural areas

12. All rights reserved © 2005, AlcatelSept, 2005 Page 12 Opening the pipe for Residential and Business users PSTN Voice Internet Branch Office Storage Business Partner Business Roaming Worker Video Home entertainment & work Gaming Service Provider IP Network New Service Network Services offered through IP: the move to VPN

13. All rights reserved © 2005, AlcatelSept, 2005 Page 13 Drivers for Access Convergence PSTN migration Replace aging/obsolete PSTN Consolidate networks & operations, leveraging BB installed base & growth Enable "soft provisioning" through platform convergence Voice in Broadband offering Launch IP based Telephony bundles via residential gateway controled by MGCP Upsell enhanced voice and multimedia services Platform convergence In common Service convergence

14. All rights reserved © 2005, AlcatelSept, 2005 Conclusion

15. All rights reserved © 2005, AlcatelSept, 2005 Page 15 Conclusion  Telecom Can be a Transformative Force GDP Drives Telecom BUT Telecom also Drives GDP  Connecting communities has the potential to bring in wealth to those communities  Create new business opportunities for both the urban and rural communities Improvements in Healthcare and Education particularly for rural communities Improvements in Government related services  E-Government  Public Safety/Security  Broadband Access is a must Many technologies available, think pragmatic  Corporate have specific needs, residential as well Broadband access can bind them on the same network

16. All rights reserved © 2005, AlcatelSept, 2005 Page 16 Alcatel strengths in each segment Business environment IP-PBX: Europe #1 Contact centers: WW #1 Voice infra: within top 4 Wireline access WW #1 Service Aware Edge & Data Aware Transport Optics: WW #1 Wireless transmission: WW #1 NB switching: WW #1 Multiservice WAN: WW #2 IP multiservice edge routers: within top 3 Wireless access Telecom satellite: WW #1 LMDS: WW #1 Services Professional services: within top 3 Network outsourcing: WW #1 Mobile access Largest installed base of 3G users GSM: within top 4 Fastest growing player Service Delivery Platform Extensive suite Leading positions in IN, Mobile Prepaid, Video applications

17. All rights reserved © 2005, AlcatelSept, 2005 Page 17 www.alcatel.com