Alcatel (Paris: CGEP.PA and NYSE: ALA) announced today that it has signed a non-binding Memorandum of Understanding with Nortel to acquire its UMTS radio access business (UTRAN) and related assets for USD 320 million. This is a key step in Alcatel’s strategy to further strengthen its UMTS market position, and thus expand its global leadership in broadband access.

With this deal, Alcatel should become one of the world’s largest suppliers of UMTS radio access solutions, and further reinforce its technology edge at a time when the UMTS market is expanding rapidly. The proposed acquisition would enhance Alcatel’s industry-leading mobile radio expertise and product portfolio with technology and products that enjoy strong recognition among leading operators such as the Vodafone and Orange groups. Alcatel also intends to benefit from significantly strengthened research and development capabilities, amongst the most advanced in the world, with the scale and know-how to lead innovation in broadband wireless access, especially in HSxPA and 3G Long-Term Evolution (3G LTE), fully leveraging Alcatel’s expertise in multi-standard radio solutions and Software Defined Radio (SDR) technology.

Under the transaction, Alcatel intends to acquire Nortel’s UMTS radio access technology and product portfolio, associated patents and tangible assets as well as customer contracts. It is anticipated that a significant majority of employees of Nortel’s UMTS access business, will be transferred to Alcatel.

Following the transaction, Alcatel would serve an additional fourteen UMTS customers around the world for a combined global footprint that amounts to one in four UMTS operators. Alcatel would also significantly reinforce its presence with Tier-1 operators, especially in world-leading 3G markets such as South Korea, Italy, Spain, France, and the UK. While strengthening its presence in developed mobile markets, the transaction would also put Alcatel in a unique position to serve the needs of major upcoming 3G markets, such as China and other key fast-growing regions, where the company already enjoys a strong GSM/EDGE footprint.

“The expertise of Nortel’s UMTS team is well-known. I am confident that the scale resulting from our combined forces (including those of Lucent, pending the conclusion of the merger) will pave the way for further success in the wireless market. We are clearly poised to become a strong number 3 in UMTS and HSxPA,” said Marc Rouanne, President of Alcatel’s mobile communications activities. “Combined with our strong GSM/EDGE position, our early leadership in WiMAX and our strong commitment to LTE, this acquisition will add further momentum to Alcatel’s broadband wireless access strategy. Through the contemplated merger with Lucent, the combined company will also enjoy a leading position in CDMA EV-DO, including a clear commitment to Rev C, thus offering the most comprehensive and innovative wireless access portfolio in the industry”, he added. “Together with our long-standing leadership in DSL, it makes us the partner of choice to assist our customers in their network transformation towards seamless broadband.”

“This deal will be a win-win for both companies and our customers,” said Richard Lowe, president, Mobility and Converged Core Networks, Nortel. “We will work closely with our UMTS access customers during the planned transition to make it as seamless as possible and will continue to provide the best support for other Nortel solutions deployed in their networks.”

The acquisition is subject to the execution of a definitive agreement and other closing conditions. The parties are targeting to complete the transaction in the fourth quarter of 2006.

Alcatel has and will continue to involve Lucent in the conclusion and implementation of this project in order to achieve the most efficient fit within the combined company.

ZAO Sky Link, the largest CDMA450 operator in Russia and Commonwealth of Independent States (CIS), and Lucent Technologies (NYSE: LU) today announced they are increasing the voice capacity of the Sky Link network in Krasnodar and enhancing it with CDMA2000 1xEV-DO technology. OAO Krasnodar Cellular Network, the regional Sky Link operator, and Lucent are upgrading existing Lucent base stations with CDMA2000 1xEV-DO technology and installing new equipment that will enable the operator’s Sky Turbo service, which provides data speeds of up to 2.4 Megabits per second. The project is beginning in the cities of Krasnodar, Sochi, and Novorossisk.

“Sky Turbo brings new, profitable multimedia services to the region and will help grow Sky Link’s reputation as a full-service 3G operator,” said Alexandr Piotrovsky, deputy general director of strategic marketing and sales for Sky Link. “The high data speeds enabled by CDMA2000 1xEV-DO – the main advantage of CDMA450 compared to the 2G standards – enables the proliferation of 3G services in the regional markets.”

“Subscribers in the Krasnodar territory and Adygea are the leaders in terms of mobile data consumption on Sky Link’s network,” said Michael Mochulsky, general director of Sky Link-Krasnodar. “In July, the share of non-voice services in our revenues grew up to 48 percent. The powerful Sky Turbo service delivers an enhanced mobile data experience to our subscribers and our main task is to make the access to the new services as convenient as possible.”

Within the project’s framework, existing Lucent base stations are being upgraded with CDMA2000 1xEV-DO channel cards and software. The Lucent Radio Network Controller (RNC) is being deployed to ensure a flexible and scalable management of the network’s RF (radio frequency) resources. Lucent Worldwide Services is providing installation and integration services.

“Every time we introduce EV-DO technology in the Russian markets, we see how it helps operators gain significant momentum via the introduction of new high-speed mobile data services,” said Dmitry Kamensky, managing director, Lucent Technologies Russia and CIS. “Operators that have deployed the technology are able to offer their subscribers various new, revenue-generating services.”

The EV-DO based Sky Turbo service delivers high-speed mobile data services and Internet access to Sky Link’s subscribers. It features the highest mobile data speeds available in Russia. The Sky Turbo service was commercially launched in December 2005 in the Sky Link-Moscow and Sky Link-St. Petersburg networks simultaneously. In March 2006, the Sky Link-Ekaterinburg network’s subscribers were granted access to the service.

Trial tests demonstrated that Sky Turbo enables subscribers to download files at average data speeds of 600-700 kilobits per second given standard network load conditions. The advanced wireless broadband Internet access and data transmission technology provides Sky Link’s subscribers with fast downloading of Internet content and large files, e-mail, IPTV, and remote video surveillance services.

The Sky Link network is based on the IMT-MC-450 standard (CDMA2000 1X and 1xEV-DO technology deployed in the 450 MHz frequency range), which provides advanced digital mobile communication services to subscribers — reliable, high-quality voice communication with the highest degree of unauthorized access protection, and high-speed data services including Internet access.

Sprint Nextel Corp. (NYSE: S) today announced its plans to develop and deploy the first fourth generation (4G) nationwide broadband mobile network. The 4G wireless broadband network will use the mobile WiMAX (Worldwide Interoperability for Microwave Access) IEEE 802.16e-2005 technology standard.

Working together with Intel, Motorola and Samsung, Sprint Nextel will develop a nationwide network infrastructure as well as mobile WiMAX-enabled chipsets that will support advanced wireless broadband services for computing, portable multimedia, interactive and other consumer electronic devices. These efforts are intended to allow Sprint Nextel customers to experience a nationwide mobile data network that is designed to offer faster speeds, lower cost, and greater convenience and enhanced multimedia quality.

The Sprint Nextel 4G mobility network will use the company’s extensive 2.5GHz spectrum holdings, which cover 85 percent of the households in the top 100 U.S. markets – the most of any wireless carrier in any single spectrum band. To access that network, Sprint Nextel will work with Intel, Motorola and Samsung to incorporate WiMAX technology for advanced wireless communications and help make chipsets widely available for new consumer electronics devices, connecting consumers to the Internet and to each other while providing them with the flexibility to do what they want or need to do regardless of time or place.

“None of us today can envision our lives without wireless connectivity or the Internet,” explained Gary Forsee, president and chief executive officer of Sprint Nextel. “Sprint Nextel is taking a major step forward by linking the incredible potential of these two cornerstones of daily communications. We’ll give customers the power to harness business information and personal entertainment easily and inexpensively — and in ways that they will one day wonder how they lived without.

This announcement is another step in Sprint Nextel’s broadband mobility leadership, and we expect to establish a first-to-market next generation network advantage. We will have a unique broadband capability for meeting the growing access and mobile Internet needs of businesses, governments and consumers when and where they want.”

In working together with Intel, Motorola, and Samsung, Sprint Nextel has the experience, network infrastructure, spectrum and distribution channels to make 4G mobility services pervasive and indispensable for customers. The company’s deployment plans target a launch of the advanced wireless broadband services in trial markets by the end of 2007 with plans to deploy a network that reaches as many as 100 million people in 2008. Sprint Nextel plans to expand mobile WiMAX network coverage thereafter.

The company will continue to invest in and offer access to its current wireless and Sprint Power VisionSM mobile broadband networks to serve customer communications needs today and into the future. As evidenced by its strong data results and expanding 3G broadband network, Sprint Nextel continues its innovation and leadership in driving mobile data.

New Business Model

Sprint Nextel has created a unique business model designed to foster the rapid deployment and adoption of mobile WiMAX technology in the United States and abroad. Sprint Nextel is expecting to invest $1 billion in 2007 and between $1.5 billion and $2 billion in 2008 relating to the 4G mobile broadband network. The WiMAX technology to be deployed in the network is expected to offer a cost-per-megabit and performance advantage that reflects a substantial improvement in the comparable costs for the current 3G mobile broadband offerings.

Commitments from Intel, Motorola and Samsung in the areas of market development, mobile WiMAX devices and other contributions to Sprint Nextel’s core business are expected to accelerate Sprint Nextel’s goal of deploying services and market adoption. Motorola and Samsung will also support Sprint’s current and CDMA/EV-DO network technologies by creating multimode devices that will support services on both the 4G network and the 3G network in areas outside the planned 4G coverage, and will provide voice service using the core 3G network. The 4G broadband network will offer a complementary, high-bandwidth service driven by data centric devices.

* Intel, one of the early members of the WiMAX Forum and one of the key contributors to the IEEE 802.16e-2005 standard, will deliver next generation WiMAX solutions for Centrino Mobile Technology and next generation computing devices. Intel will bring its extensive history in device-to-network verification as well as marketing expertise to expose customers to the breadth of new WiMAX capabilities and services.

* Motorola has been a long-standing proponent of WiMAX and will offer Sprint Nextel both single- and multimode devices designed to enable seamless mobility for users, while playing a major role in its WiMAX infrastructure roll-out. Since Motorola is the exclusive supplier of iDEN technology as well as a major supplier of CDMA and EV-DO Revision A technology, it can offer a complete end-to-end solution (from radio access network equipment to both single- and multimode mobile devices) and is uniquely positioned to expand the seamless mobility experience into the wireless mobile broadband market.

* Samsung Telecommunications America will be a primary Mobile WiMAX infrastructure supplier to Sprint Nextel and will also deliver dual-mode devices supporting Mobile WiMAX and CDMA2000 1xEV-DO, designed to enable Sprint’s Mobile WiMAX users to utilize Sprint Nextel’s existing 3G network resources. With its installation of networks in South Korea and other markets, Samsung Electronics is the first to commercially deploy Mobile WiMAX and with its alliance with Sprint Nextel will bring this global expertise to North America. Samsung is the global leader in delivering Mobile WiMAX technologies and offers Sprint a total solution including chipsets, infrastructure, mobile devices and consumer electronics focused on Mobile WiMAX and dual-mode WiMAX/CDMA services delivery.

Sprint Nextel’s long-term goal is to have a broad range of mobile WiMAX-enabled chipsets and modules and an array of portable data and consumer electronics devices available from multiple vendors which work seamlessly among Sprint’s network offerings. To that end, Sprint Nextel and other leading consumer electronic companies are planning to form a strategic marketing and product alliance for the purpose of introducing innovative consumer electronic devices and multimedia content solutions using Sprint’s 4G mobile WiMAX network.

“Sprint Nextel has built its success on being a pioneer – beginning with its rollout of the first nationwide digital fiber optic network 20 years ago,” said Sean Maloney, executive vice president of Intel. “With the choice of mobile WiMAX for its 4G mobile broadband technology, Sprint Nextel again helps move the U.S. to the forefront of technology innovation and competitiveness. Sprint Nextel’s decision confirms Intel’s belief that WiMAX is the wireless technology of choice to deliver affordable broadband access. Intel is pleased to work with Sprint Nextel, Motorola and Samsung to bring the promise of mobile broadband and WiMAX to consumers nationwide.”

Motorola Chairman and CEO, Ed Zander, stated, “We are excited that Sprint Nextel has selected WiMAX, and we believe that mobile WiMAX is a perfect choice for a visionary company like Sprint Nextel. Today’s announcement is another milestone in Motorola’s focused strategy to continue to expand and grow our wireless broadband business and advance our vision of seamless wireless broadband mobility. We expect that this decision from one of America’s leading carriers and the largest holder of 2.5GHz spectrum will influence the adoption of mobile WiMAX by other carriers worldwide.”

KiTae Lee, president of Samsung Electronics’ Telecommunication Network Business, stated, “I believe Sprint Nextel’s decision to deploy Mobile WiMAX as the 4G network technology will set a milestone in the U.S. telecommunication industry’s history and contribute to further advancements in wireless technology. Mobile WiMAX has the fastest data transfer rate among the existing wireless technologies and is based on all-IP technology. Mobile WiMAX-based services will create a new paradigm shift in wireless services and improve consumer lifestyles. I believe that Sprint Nextel will successfully provide this mobile WiMAX technology based service and begin a new revolution in mobile broadband services nationwide.”