Alcatel, HP and Microsoft Establish Global Agreement on Integrated Server Solutions for Triple Play/IPTV

PARIS — May 23, 2006 — Alcatel (Paris: CGEP.PA and NYSE: ALA) and Microsoft Corp. today announced the establishment of a global relationship with HP focused on the delivery of server solutions for carrier-class triple play/Internet Protocol television (IPTV) deployments. This announcement, combined with the existing OEM agreement between HP and Alcatel, solidifies HP as a key member of the joint Alcatel-Microsoft IPTV ecosystem. As a result, HP, Alcatel and Microsoft will work together to deliver these advanced systems to carriers deploying triple play service offerings.

The optimization of HP’s server solutions will include the ability to provide superior support for the Microsoft® TV IPTV Edition within Alcatel’s overall Triple Play Service Delivery Architecture (TPSDA). HP will validate and recommend the appropriate HP ProLiant and HP BladeSystem servers to optimize the performance and scalability of Microsoft TV IPTV Edition applications.

In addition to providing optimized server solutions, the three companies will also establish joint global go-to-market efforts that will include sales and marketing activities. Alcatel will include specific bundled server solutions built with HP ProLiant and pre-integrated HP OpenView IT element management software in its end-to-end triple play offering.

The combination of Alcatel’s network experience, HP’s proven server solutions and Microsoft’s software expertise and comprehensive IPTV Edition is expected to speed time to market for IPTV services while improving system performance and architecture scalability for telecommunications service providers.

“Our focus as a company remains on meeting the needs of our customers,” said Monika Maurer, president of Alcatel’s fixed solutions activities. “By leveraging HP’s proven server solutions we can provide deeper levels of integration throughout each piece of the triple play value chain. This enables us to provide solutions to our customers that truly address their needs and help them reduce the time to market, cost and complexity associated with sophisticated triple play deployments.”

“Alcatel and Microsoft are changing market perceptions about IPTV services, and HP is pleased to be extending its long-term relationships with both companies,” said Peggy Dau, worldwide director, Broadband & Media Solutions, Network and Service Provider business at HP. “HP will leverage its combined experience in telecommunications, digital media and systems architecture to deliver a scalable and cost-effective solution that meets the demanding requirements of IPTV.”

“Today’s announcement demonstrates the growing momentum of the IPTV industry,” said Christine Heckart, general manager of marketing for the Microsoft TV Division. “Service providers benefit from increased system performance and enhanced architecture scalability that result when industry-leading companies such as HP join the IPTV ecosystem.”

About Alcatel’s User-Centric Triple Play

To meet today’s quest for increased personalized and interactive services, Alcatel helps worldwide operators transform their networks and deliver a new, way better end-user experience. Alcatel’s user-centric triple play builds on its leadership in broadband technology, IP networking, optics, new multimedia and video applications, as well as end-to-end services integration. End-users will enjoy unique, exciting services including video on demand, personal TV, community channels, online gaming and sharing of music, photos and home videos, all delivered simply and seamlessly via a range of devices and networks. Alcatel is currently involved in more than 35 triple play network projects worldwide including AT&T/SBC, BellSouth, France Telecom, Swisscom, Fastweb and Chunghwa Telecom. For more information: http://www.alcatel.com/tripleplay

About Alcatel

Alcatel provides communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or employees. Alcatel brings its leading position in fixed and mobile broadband networks, applications and services, to help its partners and customers build a user-centric broadband world. With sales of EURO 13.1 billion and 58,000 employees in 2005, Alcatel operates in more than 130 countries. For more information, visit Alcatel on the Internet: http://www.alcatel.com

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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