alcatel's next generation solutions

Alcatel @ GSM World Congress 2001

February 20-23, 2001

Alcatel's next generation solutions

Table of Contents

1 - Move up to new revenues : Alcatel showcases end-to-end solutions 1

2 - From 2G to 3G mobile infrastructures 5

3 - How to migrate to 3G with Alcatel's mobile core network 8

4 - Alcatel Infusion STP C 11

5 - Creating Value through End-to-End Revenue Generating Applications 13

6 - Nextenso 14

7 - What will my mobile look like in 2003? 16

8 - The dawn of Bluetooth wireless technology 22

Press Contacts :Laurent de Segonzac Tel : +33 (0)1 40 76 15 04Mobile : 33 (0)6 07 55 99 [email protected]

GSM World CongressFebruary 20-23, 2001

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1 - “Move up to New Revenues !”

At the 3GSM World Congress,Alcatel Showcases live Mobile Data Services

Cannes – February, 20, 2001 — Alcatel, along with service providers, network operators

and networking companies have all played a vital part in bringing the Mobile Internet onto the

screen of subscriber's mobile phone. As mobile subscribers discover a growing array of

Internet-like services available on their handsets, Alcatel is speeding development and

availability of a range of end-to-end solutions that enable operators to offer the new mobile

data services. Pioneering partnerships with key players as well as robust internal investment in

research and development have positioned Alcatel at the leading edge of the mobile telecoms

industry, including infrastructure, terminals, applications and content aggregation. This broad

expertise means that mobile operators can define the type and timing of service deployment to

fit their own market strategy.

Alcatel’s mobile expertise spans five core needs:

• Ground infrastructure, where Alcatel’s Evolium™ range includes radio access, core

and backbone networks, all run cost-effectively with Alcatel’s Operating Support

Systems (OSS) and Business Support Systems (BSS) to ensure service provisioning,billing and customer care,

• Enabling network technologies and software such as prepaid solutions, number

portability, mobile Virtual Private Network and others, where Alcatel’s solutions have

proved to be huge successes, driving up mobile penetration substantially for manyservice providers,

• Edited portal and application software, where Alcatel’s Nextenso suite of

multimedia, multiterminal portals features advanced applications such as dynamic

home page, location-based services, smart-channel of information, syndication and

more,

• Integrating software using multimedia portal, advanced localization,

personalization technology and intelligent messaging solutions to enable service

providers to provide full mobile Internet services like m-commerce,


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• End-to-end solutions, where Alcatel has a proven capacity to supply them on a

turnkey basis, from consultancy, project management to facility managementenabling operators to generate revenue quickly.

Alcatel has already supplied operators with end-to-end solutions for so-called 2.5G services

(GPRS) and is actively forming partnerships for full-blown third-generation (or 3G) services in

such attractive areas as mobile commerce, e.g. electronic cinema ticketing, or infotainment,

e.g. network games. The 2.5G solutions are based on GPRS and EDGE technologies —GPRS

being deployed and in commercial operation in several networks built by Alcatel—while the

3G/UMTS solutions are currently in development inside Evolium SAS, the joint-venture that

Alcatel set up last year with Fujitsu. Alcatel’s 3G core solutions will enable operators to roll-out

their UMTS networks for both data and voice applications, and also to migrate gracefully,

from 2002, to an all-IP network, complete with multimedia services on native-IP terminals.

Visitors to Cannes will experience various end-user dedicated applications. Among Alcatel’s2.5G services, operators are already offering or trialing these:

• Unified messaging, one of the earliest 2.5G services that Alcatel has deployed for its

customers. At Cannes, visitors to Alcatel’s showcase can access voice, fax and e-mail

messages from a mobile phone as well as from any Internet terminals. The demo is

part of the theme “Enhanced Communications on the Go”, one of five business themes

illustrating Alcatel’s global message “Move up to New Revenues”.

• Location-based services, such as “Where’s the next?” for hotel information, car rentals,

galleries, parking garages, tennis courts, taxis, teller machines, pharmacies, petrolstations, ski lifts, etc. The demo is part of the theme “Fun Ways to Boost Traffic”.

These services make use of Alcatel’s Nextenso platform-independent software suite of modular

applications and services for creating and managing multi- device Internet portals. The

services can be personalized to customer profiles and be driven with localization-based

features. Services that are targeted using the subscriber’s preferences and location have a

significantly higher value to the service-provider.

Exciting 3G services in entertainment are also the focus of partnerships recently announced by

Alcatel with Kalisto (a developer of interactive video games) and UGC (a cinema chain).

[Separate releases are available on both partnerships.] In the electronic cinema ticketing

application (“Fun Ways to Boost Traffic”), mobile subscribers can define their profile in terms

of favorite films, directors, actors and more, and be alerted when they are near a cinema

which is about to run a program of interest to them. With UMTS speeds, it will be easy to


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entice a film-goer with a full-color trailer (even with stereo sound), and then enable the

subscriber to (pre-) pay a seat and avoid waiting. A video demo of this application is available

on the Alcatel showcase in Cannes.

Video games will benefit from 3G speeds and are also being demoed by Alcatel at Cannes.

The games will be accessible via a personal digital assistant linked to mobile terminals. As

young people are among the most attractive categories of early adopters, and are good

predictors of revenue-generating services, the availability of these games is essential for

mobile service-providers. The young are also keen users of affinity groups and community

platforms, both applications that will become far more attractive as mobile network speeds

rise.

At Cannes, visitors can experience in an UMTS environment smart end-user content

applications such as Alcatel’s Personal Media Cards (“Enhanced Communications on the Go”)-

where greeting cards can be sent to friends and family combining photos taken on a Webcam

with a voice recording and a written message - as well as the Community Board, where

multimedia messages can be posted or forwarded to a member of the person’s affinity group.

Subscribers can set up private user groups and archives, and manage them from a mobile

phone.

In still further developments known as “syndication”, Alcatel makes available payment server

packages that can be used for purchasing a range of products, services and data streaming

(audio and video). Users select goods or services for purchases, accessing the vendor’s

catalog or inventory over their mobile phone and confirming purchase over it, too. The Alcatel

payment server performs financial authorization by contacting the credit card acquirer and

forwarding the result to the merchant’s site. With these features, Alcatel is paving the way to

real mobile commerce.

About AlcatelAlcatel (Paris: CGEP.PA and NYSE: ALA) builds next generation networks, delivering integratedend-to-end voice and data networking solutions to established and new carriers, as well asenterprises and consumers worldwide. With 130,000 employees and sales of EURO 31 billionin 2000, Alcatel operates in more than 130 countries. For more information, visit Alcatel onthe Internet: http://www.alcatel.com/

Alcatel is one of the largest suppliers of mobile infrastructure worldwide. Alcatel's state of theart Evolium™ Solutions enclosed all the necessary radio and core network infrastructureelements as well as a complete set of revenue generating services targeting the end users andcreating new profits from differentiation, in an end-to-end perspective.

By creating Evolium SAS, an Alcatel-Fujitsu company, Alcatel clearly reinforces its position in

both mobile infrastructure and mobile Internet. Evolium SAS combines Alcatel's expertise in


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GSM, GPRS, and EDGE as well as in ATM and IP technologies, with the advanced experience

of Fujitsu as supplier of NTT DoCoMo. By the end of 2000, NTT DoCoMo will have twenty

million i-Mode subscribers in Japan and will start the commercial operation of its 3G mobile

communication service in the spring of 2001. Alcatel, which played a vital part in developing

the mobile Internet market, in particular through the successful roll out of GPRS commercial

networks worldwide, has today a timely UMTS offering. Press contact numbers at Cannes:


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2 - From 2G to 3G mobile infrastructures :Alcatel's full support approach.

3G is on the way and GSM/GPRS is the learning process

As a complement to the current 3G license allocation process (today mainly impacting Europeand certain Asian countries), there is still a major opportunity in the coming years for GSMnetwork extensions, making them evolve towards mobile Internet through GPRS and EDGE.

The GSM technology is continuously extending its footprint and has become a de factoworldwide standard. For instance Brazil and other countries in Latin America have recentlyselected GSM for their mobile service. Furthermore, in the U.S.A, GSM is also increasinglybecoming the preferred technology with the recent acquisition of existing GSM networks (e.g.Voicestream) by non-U.S. operators and the decision of AT&T Wireless (the leading U.S.mobile operator) to introduce GSM/GPRS and EDGE.

Considering this worldwide success in terms of footprint (GSM is now present on all continents)

and penetration (50-60% is reached in the developed world), some operators in Europe are

considering a gradual introduction of mobile Internet services. This approach, based on

GSM’s success, envisages introducing packet data technology (GPRS) and in a second step,

extending the services through high speed mobile internet either by EDGE, UMTS or both.

Operators deserve the right solutions

Alcatel has strengthened its position in the GSM infrastructure market over the last two years.Evolium™ is now an industry-leading product range. Alcatel has massively invested over thelast years in mobile Internet (in particular in GPRS) as a natural evolution of GSM networks.This leadership position has recently been illustrated by TMN’s commercial launch of GPRS inPortugal, the first one in Europe. Alcatel supplied also tele.ring in Austria with a completeGPRS end-to-end solution (radio and core) including service platforms.

Alcatel’s vision is that the GPRS success will trigger market evolution to mobile Internet andthird-generation services. Some GSM operators who are now generating substantial revenuesfrom their GSM investment want to expand revenues from their spectrum allocations (in the900- and 1800-Mhz bandwidths) with new voice and data services. In this context,GPRS/EDGE offers an alternative evolution path towards mobile Internet, complementary toUMTS

This market fits perfectly into Alcatel’s strategy as defined during the year 2000. Through thecreation of Evolium SAS, the joint venture in majority-owned by Alcatel, combining Alcatel’sGSM expertise of Alcatel with that of Fujitsu in W-CDMA, Alcatel now has the critical R&D


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mass to support GSM network evolution. This includes GPRS add-ons and EDGE facilities aswell as field-proven 3G UMTS solutions with aggressive time-to-market objectives.

Combining 2G, 2.5G and 3G R&D forces in a single product development entity is proving tobe the right strategy. It emphasizes multi-standard solutions including GSM, GPRS, EDGE andUMTS and their evolution towards all-IP next-generation network architecture.

Evolium™ concept: One platform evolving with backward compatibility

Alcatel has helped operators introduce commercial GPRS service in several countries duringthe last few months and is preparing introduction of two major steps in mobile Internet withUMTS and EDGE.

UMTS field trials being conducted this quarter will be followed by pre-commercial networks,

which are expected to be on the air by the middle of this year. Roll-out of commercial

networks will begin in the second half of 2001, leading to commercial 3G introduction by the

beginning of 2002.

EDGE will confirm Alcatel’s leadership in GPRS and mobile Internet since EDGE is a directevolution of GPRS. The Evolium™ GSM products are today EDGE-ready, thanks to EDGEcompatible transceivers already introduced, enabling operators to prepare their network forintroduction of high-speed data services without any additional cost (up to 384 kbit/s with arealistic throughput at application level on commercial terminals of 100-120 kbit/s). EDGEcommercial service is expected as of mid-2002 onwards...

GPRS/EDGE and UMTS: Adding quality of service and gigabit capacity

EDGE should be considered as an enhancement of GPRS service, which already providesalways-on service. Even if GPRS can in theory provide up to 155 kbit/s per user, the real end-user data rate depends heavily on the network as well as network planning, load andinterference levels. The actual end-user data rate directly hinges as well on terminal capability.Currently available GPRS terminals provide speeds of up to 40 kbit/s.

EDGE behavior is similar to GPRS, but with improved modulation EDGE can provide servicesup to 384 kbit/s. Given the expected capabilities of EDGE terminals, the end-user data rate atapplication level will reach 100-120 kbit/s.

UMTS technology provides some major enhancements compared to GPRS/EDGE in terms ofthroughput and response time. Two variants of UMTS are being introduced. The FDD variantis expected to provide service up to 384 kbit/s. This capacity can be guaranteed to the end-user but needs to be restricted to a limited user set due to the radio networks’ overall capacitylimits. At a later stage a second variant of UMTS (TDD) will be introduced, providing up to 2Mbit/s. This type of service will, however, be concentrated on very dense areas or specificindoor applications.


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kbit/s Maximum data rateallowed by the radio interface

End-user data ratemeasured at the applicationlevel

GPRS 155 kbit/s 30 - 40 kbit/sEDGE 384 kbit/s 100-120 kbit/sUMTS FDD 384 kbit/s 384 kbit/s (*)UMTS TDD 2048 kbit/s 2048 kbit/s (**)* For a limited set of users** In very specific environments

Alcatel's development of Mobile Internet

• 1996: Home banking with Cellnet/Barcklays. A world premiere• 1999: WAP with Cegetel. Another world premiere• 1999: GPRS with France Telecom Mobile at Telecom Geneva'99• 2000: GSM World congress and CeBIT. Alcatel was the one and only vendor

capable of demonstrating GPRS at a data rate of up to 40kbit/s on dozens of handsetsusing various interfaces - handsets, PDAs, laptops, and so on, and one of the few todemonstrate EDGE and UMTS live applications.

• 2000: With TMN in Portugal: high-speed GPRS commercial service (3+1 - 40kbit/scapability) including WAP over GPRS and GPRS prepaid services - a first in Europe.

• 2000: frame agreement with Orange - the world's second ranking mobile operator -for the supply of UMTS infrastructure equipment.

• 2001: TMN (Portugal Telecom) selects Alcatel as supplier of UMTS/3G Technology


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3- How to migrate to 3G with Alcatel’s Mobile Core Network

Alcatel’s Mobile Core Network solutions are the best way to enter the 3G

communication world. They perfectly meet mobile operators requirements in the

deployment of their new networks or in the optimization of their existing

infrastructures. Moreover, they ensure an efficient evolution towards 3G, minimizing

the migration costs and protecting operators' investment.

Alcatel’s 3G core solutions will enable operators to roll-out their UMTS networks this

year for both data and voice applications, and also to migrate at their own pace, as

from 2002, to an All-IP network complete with multimedia services on IP native

terminals. Alcatel’s 3G core network solutions capitalizes on our 2G core technology,

the most powerful solutions available on the market today. Alcatel’s recent US

acquisitions have strengthened our solutions with the integration of best-in-class

ATM/IP data core platform.

Key steps in Alcatel’s deployment of 3G Mobile Core Network solutions:

1. UMTS Core Network solution available this year.Alcatel’s 3G core deployment strategy fits the needs of operators setting-up new

networks as well as the needs of operators with a current 2G network, enabling them

to successfully migrate from 2G to 3G in both circuit and packet domains. The

operator will benefit from a completely new range of services including multimedia

and high-speed data services as well as access to an enhanced set of location based

information services. Alcatel’s core network solutions are fully scalable and covers a

wide range of configurations, allowing Services Providers to adapt their investments to

their needs.


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Fully compliant with GSM and UMTS standards, the Alcatel 1000 MSC (Mobile

Switching Center) is able to handle up to 1.6 million UMTS subscribers, allowing

operators to minimize their equipment costs by centralizing switching and

management functions. Alcatel’s core solutions secure interworking with other 2G and

3G radio manufacturers. From the packet perspective, the Alcatel 1000 SGSN

(Serving GPRS Support Node) is able to handle up to 900,000 UMTS subscribers. It

comes fully featured (for example in the fields of security, encryption and charging)

and supports all infrastructure network services to provide the required quality of

services to run high volume applications.

2. During 2002, extension of 3G Core Network to serve the market growth of 3Gterminals, and enable Multimedia services.Multimedia services are one of the key UMTS applications by which operators will be

able to increase revenues and differentiate themselves from competitors. Alcatel’s 3G

core network features multimedia session handling combining both data and voice

services. The Alcatel Multimedia Softswitch establishes and controls these multimedia

communications throughout the packet based infrastructure. By providing open

interfaces to third party applications, it allows 3G operators to enrich seamlessly their

portfolio of services for enterprises as well as residential end-users.

Alcatel’s 3G network solutions will enable operators to offer new high-speed, high-qualityUMTS services such as chat, multiparty videoconferencing, Click2Dial, unified electronic mail,video streaming and MP3 Music downloading. A selection of these services are demonstratedon the booth.

3. From 2003, completion of All-IP target along with the generalization of new IP 3Gterminals.At this stage, operators will be able to deploy premium voice and real-time services

over a multimedia infrastructure. Operators will thus be able to implement an All-IP

network right on the top of their initial packet switched infrastructure.


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The Alcatel All-IP solution implementation offers various advantages:

- The delivery of unified services around multimedia with support of Voice Over

Packet (IP). Very high capacity Call Servers are provided to support this mix of

traffic, with a capacity reaching 5 million Busy Hour Call Attempts.

- The rationalization of investments and maintenance efforts on the core network will

allow operators a smooth and timely migration of their voice circuit-switched traffic

to the packet-switched infrastructure associated with the multimedia environment.

Alcatel is one of the largest suppliers of mobile infrastructure worldwide. Alcatel's state

of the art Evolium™ Solutions include all the necessary radio and core network

infrastructure elements as well as a complete set of revenue generating services

targeting the end users and creating new profits from differentiation, in an end-to-end

perspective.


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4 – Signalling the way forward in number portability:

Alcatel INfusion STP C

As GSM operators migrate towards 3G (Third Generation), they are expanding their SS7capacity to be able to handle the increased signalling traffic these networks require. Part ofAlcatel’s migration strategy for GSM operators includes the Alcatel INfusion STP C, a highlyscalable, reliable, stand-alone Signalling Transfer Point. Its cluster based distributedarchitecture, high capacity SS7 over IP links, and enhanced signalling services such as flexiblerouting, number portability and gateway screening offer the capabilities needed to build 3GGSM networks.

The Alcatel INfusion STP C is the solution of choice in a number of GSM networks, includingthose of three of the top 15 GSM operators. These STPs are the foundation of SS7 networksproviding highly reliable message transfer, flexible message routing, centralised managementand security, and network interconnectivity. The Alcatel INfusion STP C offers operators valueadded services such as Mobile Number Portability (MNP), Local Number Portability (LNP) andApplication Location Register (ALR) Flexible Routing.

One of the most important requirements in a signalling network is the ability to interconnectsuccessfully with other networks. To support network interconnectivity, the Alcatel INfusion STPC provides both signalling gateway and gateway screening functions. With these functionsnetworks can quickly relay signalling information to other approved operators’ networks andprovide firewall protection to their own network.

Early this year, the Alcatel INfusion STP C’s trunking capacity increases to 960 64-kbit/s SS7links and then to an equivalent of 2.300 64-kbits/s SS7 links using SS7 over IP. Systemcapacity will increase from 22.000 transactions per second (tps) to 46.000 tps. Low cost, highbandwidth IP connections to HLRs (Home Location Registers), VLRs (Visitor Location Registers),SCPs (Service Control Points), voice mail systems and SSPs (Service Switching Point) helpsupport the increased SS7 traffic incurred by number portability and by the new applicationservices required by operators to remain competitive and profitable.

Enhanced signalling functions, such as ALR Flexible Routing, allow GSM operators maximumflexibility and network efficiency in managing mobile numbers. This allows operators toexpand network resources such as HLRs, SMSCs (Short Message Service Centers) and VMSs(Voice Messaging Centers) as their customer base grows. The INfusion STP C ALR databasecan currently support over 28 million records and will grow to over 50 million by the end ofthe year.


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Number portability issues are easily resolved with the Alcatel INfusion STP C. Numberportability functions reside directly on the INfusion STP C, which is less costly thanimplementing them on multiple service nodes. With the inclusion of the LSMS (LNP ServiceManagement System), Alcatel offers a complete number portability solution with maximumbenefits in flexibility and maintainability.

Through its efficient design, the INfusion STP C provides cost savings as a result of its SS7processing, link utilisation and centralised network administration. By the end of 2001, theAlcatel INfusion STP C number portability database will support over 50 million entries; andthe LSMS will provision up to 400 updates per minute on a sustained basis.


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5 - Creating Value through End-to-End Revenue GeneratingApplications

In today’s marketplace where new applications are constantly emerging, Alcatel meetsend-user and service providers’ needs with a dynamic and complete integratedapplications portfolio enabling the increase of present and future revenue streams. Tobe successful, such applications must be attractive, adaptable and easy to deploy.Traditionally in the mobile market, service provider’s revenues have been derived frominitial set-up charges, monthly subscriptions and usage fees. Thanks to broadbandmobile connectivity (today with GPRS and tomorrow with UMTS) and rapidly changingend-user behaviours, new revenue sources are appearing with transaction fees orcommission from content providers and content aggregators. This evolution requirescomprehensive systems to support all the players in this new delivery chain.Alcatel’s approach is to provide pre-packaged solutions to service providers in order toreduce new applications deployment time and to minimise investment and operationalcosts. Alcatel is integrating and customising these packages to deliver turnkey solutionsmeeting precisely the service providers’ specific requirements.Alcatel’s pre-packaged solutions for the mobile market are combining the followingareas of interest:. Mobile prepaid where Alcatel enjoy a strong position creates opportunities for “e-purse”-like payment systems.. Applications such as 1) unified messaging - bringing together voice, fax and e-mail -,2) voice portal - which makes internet content accessible through the telephone -, 3)personalisation and content applications providing added value to end-users andenhancing relationships and loyalty. Location based applications, which intelligentlyapply knowledge of the end-user’s position to offer him relevant goods andapplicationsc) Full OSS enabling the management of infrastructure, applications and customers(CRM, contact center).At the 3GSM Congress 2001 in Cannes, Alcatel is demonstrating a large portfolio ofapplications in a UMTS & GPRS demo network. This includes a life and real-timeelectronic cinema ticketing application in a UMTS environment showing visitors acombination of network intelligence and attractive end-user content. This applicationmakes use of user profiling, push services, location as well as payment transactionand video.Other application demonstrations at Cannes cover unified messaging solutions,charging of mobile data, smart content applications easying end-user’s daily life andthe innovative combination of mobile Internet and voice in a Voice Portal demo.Live access to tele.ring’s mobile applications is rounding up the demonstrations onAlcatel’s world of applications. tele.ring is the 4th mobile operator in Austriadifferentiating through pioneer mobile internet applications.


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6 - Nextenso: a suite of modular applications and services

for creating and managing multi-terminal Internet portals

Nextenso, a wholly-owned subsidiary of Alcatel, created in June 2000, is an independentsoftware vendor of a suite of modular applications and services for creating and managingmulti-terminal Internet portals - daily entry point onto the Net. Ready-to-customize Nextensoapplications and services easily integrate into all wireless and wireline networks, leveraging thevalue of portals by taking advantage of existing Internet content and providing continuity ofservice across all devices and environments. The unique carrier- grade architecture of theNextenso solution is rapid to deploy and responds to the market’s demand for the highestquality of service and availability.

This software suite is designed for telecommunications operators who want to enhance theirnew-generation investments with value-added services; for content suppliers, such as bankswanting to be at the center of e-banking activities; for the media, to help increase audienceratings and enhance the information available on the portal; and for all companies wantingtheir on-the-go employees to be able to keep in touch.

Nextenso applications are accessible from a large range of existing and future terminals:mobile phones, personal digital assistants, PCs, web screenphones, Internet televisions, etc.

Nextenso has a four-fold strategy:

• To provide the best product range on the market combining extensive functionality,reliability, performance and scalability;

• To increase its partnership network in order to promote international growth;• To be close to customers, helping to develop their product range and responding to

their needs;• To satisfy existing customers with the high quality of Nextenso applications and services

Nextenso’s aim is to bring added value to existing and future information andcommunications services. Nextenso offers mediation and aggregation tools to facilitate thedaily use of new Internet terminals by:

• Adapting each type of content to each type of terminal.• Offering rich value-added and multi-terminal services.• Supplying ready–to-install applications for daily Internet use.


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Nextenso’s expertise as a whole lies in being able to integrate, within the same range ofproducts and services, the best of the telecommunications and Internet worlds, namely:

• On the one hand, a knowledge of terminal and network requirements and the relatednecessary quality of service;

• On the other hand, innovation of the Internet world in the domain of services offeredand economic models.

This has led to develop a range of more than 20 applications and services capable ofsupporting millions of users.

Nextenso uses the Java language, which has proven itself well adapted to these types of serverapplications. Nextenso runs on HP/UX, Solaris and Linux.

Nextenso 3G Mobile Pack has been specially created for operators wishing to be succesfulin the 3G mobile networks. Nextenso is fully commited to deliver Telecom companies therichest portal software suite allowing them to deploy new revenue generating applications,enrich their internet services, differentiate from competition within a carrier-grade basedarchitecture.

Nextenso is based on Internet standards both for communication protocols (HTTP / IMAP /WAP) and data representation (XML). To accomplish this, Nextenso participates innormalization / standardization forums such as W3C, WAP Forum and the ETF.

Since a total solution must completely satisfy all the needs of its targeted markets, Nextensochose to join with several business and technological partners, as well as content and serviceproviders, to offer its customers an increasingly wide range of services.

Today, Nextenso has more than 15 customers plus several trials around the world.


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7 - “What will my mobile look like in 2003?”Alcatel's 3-year countdown to 3G.

First of all, your mobile phone probably won't be a phone. It will be better.You will actually have a choice of devices depending on your specific needs.

Get ready for 3G – the 3rd Generation of mobile communications. It's a radically new age of ultraconnected, ultra personalized communication. Made possible by UMTS technology and Alcatel researchand development.

WHAT IS UMTS?UMTS (or Universal Mobile Telecommunications System) is the broadband system for wirelessmultimedia communication of the future. It aims to be THE standard in mobile communications.A global family of networks that will finally make easy global roaming a reality. It also aims tobring the most services, the widest range of functionality and the greatest possibilities to themost people. It's estimated that there will be almost 2 BILLION users of UMTS worldwide by2010.

THE ALCATEL VISION

Alcatel is building a more connected world of communications where people and devices will be moreclosely linked than ever before. UMTS will play a central part in achieving this goal. As a global telecomplayer, Alcatel has got the flexibility and unique ability to design end-to-end 3G solution.

For Alcatel, 3G is more than mere evolution - it's Revolution.

It's all about giving people what they want. Mobile users want increased bandwidth and more access tosophisticated online services. They want high-speed multimedia access. They also want streamlined useof fixed and mobile services. Alcatel is going to deliver it to them.

It's all about serving customers better. Making their lives easier. More comfortable. More enriching.Alcatel is putting the research dollars into UMTS to prepare the way for a more connected mobilelifestyle. To make devices more intelligent, technology more intuitive, and the Internet more accessible.Thanks to its design & quality excellence fully recognized.

Backed by Alcatel Research & Development, UMTS is gaining overwhelming acceptance as thebenchmark system for wireless communication in the coming era. This is not technology for technology'ssake. The driving force behind everything Alcatel does is real consumer needs.

This powerful third generation system will offer customers a complete portfolio of voice and dataservices - including graphics, video streaming and high-speed Internet access. What's more, customerswill access these services wherever they are, whenever they want.


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Importantly, Alcatel will continue to actively pursue industry partners with which to develop the nextgeneration of electronic appliances and a futuristic new wave of services.

By taking an early lead, Alcatel is ensuring its place in guiding the future of our wireless world.

For several years, Alcatel has been a growing force in the mobile communications market (Alcatel iscurrently n°3 in the European GSM market and n°4 worldwide – Dataquest 1Q2000). Alcatel'sunrelenting commitment to pushing the technology envelope has resulted in a string of tangiblesuccesses:

In 1997, Alcatel launched the first GSM implementation of SIM Application Toolkit (SATK) to create amobile commerce solution in conjunction with Cellnet and Barclaycard UK.

In 1998, Alcatel launched the world's first pocket format Smartphone, a mobile with easy touch-screennavigation via menus and icons.

In 1999, Alcatel introduced the first Internet-ready GSM phone. Also in 1999 saw the first pilot versionof a Smart Card Reader accessory for the Alcatel One Touch Pocket phone, to enable easy mobile e-commerce.

In 2000, Alcatel is one of the most advanced mobile manufacturer in BlueTooth radio technology.

Today, more than ever, Alcatel innovation and technology clearly continues to lead the industry.


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THE EVOLUTION OF YOUR MOBILE

The next few years have some exciting developments in store. With every step, you will gain access to anincreasingly broad transmission band which will, of course, allow you to do increasingly cool things withyour mobile. Along the way, your phone will become simpler to use, with clever intuitive navigation andlots of smooth new curves.

TODAY – GSM

A sleek example of contemporary design. With the latest WAP functionality, it's as beautifulon the inside as it is on the outside.

2001 – GPRS

A bigger screen to view more content. Faster, cheaper access to services withdata exchange at 51,000bps (virtually the modem speed of your PC today).

2002 – GPRS /UMTS


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Even bigger screen, and it's in color. Super fast rate of data exchange(90,000bps) – send and receive photos, access richer, more personalized functions and services.

2002–UMTS : WELCOME TO THE AGE OF TRUE MOBILE INTERNET

UMTS is making it all possible. And Alcatel is making it all the more exciting.

In 2002, the mobile you use will depend on what you need it for. Alcatel envisions three main familiesof 3G products, with each product family catering to specific usage and consumer needs. The firstfamily, "Audio Centric", handles voice and music. The second family, the "All-in-One", will offer fullfeature, multimedia mobile Internet and will be content driven. The third family , a kind of "UMTSModem", will be a multi-purpose Bluetooth device offering seamless connectivity with all kinds ofbusiness and leisure devices. Here they are:

THE MOBILE FOR EVERY POCKET.

Want to call a friend or business contact? Just say their name intoyour pen-sized Alcatel voice-centric device. You'll be connected in lightning speed and the sound qualitywill be crystal clear. Also perfect for downloading or sharing brilliant quality digital music files. Tiny –because all the voice recognition software (and your personal phone list) – reside on the phonenetwork, instead of taking up valuable space inside your phone.

MOBILE PHONE OR SWISS ARMY KNIFE ?


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Imagine a phone that lets you join a video-conference, access heavy data files, surfthe Web, download the latest music video clip, buy a holiday online, or just call to say you'll be late fordinner...and it fits inside your pocket. Meet the compact Alcatel full feature phone.

WEIRD SCIENCE: THE MYSTERIOUS LITTLE BOX THAT DOES EVERYTHING.

Well, almost everything. Code-named "3G modem", this technological wonder fromAlcatel's R&D labs will revolutionize our lives. About the size of a credit card, it goes everywhere with youto act as a magical "go-between" device to connect you, your favorite electronic equipment, the Internet,and other people. Using the BlueTooth system of wireless connectivity, countless dreams will suddenlybecome our everyday reality:

Games.

Games companies see the incredible wealth of opportunity in beingable to give people better mobile access to the best games. People who love playing games, whenever


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they can catch a spare minute or five, will love UMTS. The Alcatel "3G modem" will allow them toinstantly link console, monitor and other players on the Web.

Fashion.

Alcatel is helping drive the move into wearable wireless communicationdevices. Sunglasses, jackets, shoes, almost anything you can wear, Alcatel will be able to transform intoa cool communication tool.

The smart watch.

A connected watch that could bring you Web TV, video-conferencing, as wellas the correct time in the time zone of your choice.

Automotive safety.

The motorbike helmet visor that tells the rider there's an accident to avoid 200meters ahead. The rider's "3G modem" connects a Web-based traffic safety service with the helmet toproject non-intrusive information onto the inside of the visor.

Health.


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For people with specific health problems, here's a sensational development.Sensors on your body monitor heart rate, blood pressure, blood sugar levels, temperature, whatever.Your "3G modem" links this real time information to the Web, your personal health records and, ifnecessary, the hospital or your chosen specialist. Equipment could also be designed to administercorrect doses of medicine.

Everyday life.

You're on your way to the cinema but don't know which movie to see. Why not use your UMTS featurephone to download and instantly view the trailers of what's showing?

HOW IS UMTS MAKING IT POSSIBLE?

UMTS will provide such a broad band for transmission of data that the possibilities are virtually limitless.

Application designers and programmers will have a ball with UMTS – it allows them to be morecreative, to offer richer applications, and more exciting services.

WHO IS MAKING THE UMTS REVOLUTION HAPPEN?

With several hundred key players already subscribing to UMTS, it looks set to dominate the worldmarket. Network operators, manufacturers and equipment providers are all joining forces to make sureUMTS makes it easier for consumers to stay in touch.

COEXISTING TECHNOLOGIES.

Although UMTS is light years ahead of WAP and GMS technology, people who choose to stick to theirold mobile will still be able to use them.


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8 - The dawn of Bluetooth wireless technology.Alcatel’s early head start.

The world wants more mobility. The world wants more wireless devices. Wireless phones,wireless computers, wireless organizers, wireless everything. But being wireless doesn’t justmean a device that can survive by itself on battery power. The new wireless world is allabout being connected. Devices connected to each other and the Web without wires,people connected to people via wireless devices, people enjoying on-the-run connection tothe Internet.

Alcatel gets behind bluetooth, the promising new development.

These are the dreams that Bluetooth is turning into reality. And Alcatel, with one of theworld’s most innovative and advanced Bluetooth R&D labs, is leading the way. In fact,Alcatel is about to astonish the world by launching one of the very first Bluetooth mobilephones set to be commercially avaible in the spring of 2001.

What is Bluetooth ?

Bluetooth technology is a wireless way to connect electronic devices to each other. Putsimply, it’s a radio link, much like your GSM phone today but targeted to short rangecommunications. Bluetooth does the same thing as infrared but is not directional. To zapinformation between infrared laptops or palmtops today, you have to aim. Bluetoothtechnology, on the other hand, is based on radio waves with the range cleverly limited to10 metres. This close range allows the user to set up a Personal Area Network (PAN) ofwirelessly connected devices. It will basically spell the end of cables and infraredconnections, and make everyone’s life much easier.


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The explosion in mobile communications.

Demand for mobile communications devices is growing at a spectacular rate. In 2002there will be 650 million mobiles worldwide*. In 2001, there will be more mobiles sold onthe planet than watches (520 million over 500 million). PC sales will remain static ataround 150 million. Alcatel is leading the way in an industry that is quite literally on themove.

New usage of mobile phones.

Keeping up in the mobile technology race is all about keeping up with what the publicwants. Today, people want to be able to use their mobiles for more than simply making aphone call. Much more. They want to be able to upload, download, share or enjoyanything from e-mail and mobile Internet to digital music, digital photography, streamingvideo, everything digital.

Whatever happens, the overriding principle of a mobile phone is that it offers mobility. Ithas to be light and autonomous and even though mobiles are capable of offering moreand more functions, we don’t want a big device to carry around. This mindset is giving riseto a new generation of wireless partner devices : the wireless headset, the wireless monitor,and wireless access to information & fun on the net (WAP).

The new opportunity made possible by Bluetooth wireless technology is to give people morewireless functionality, and in the process, give people more freedom to move. The PersonalArea Network will multiply the power of each device by creating connectivity in betweendevices. Imagine your PC, palmtop, digital camera, printer and mobile phone allcommunicating with each other, all without wires, and also connected to the Web.

Sources: Dresdner Kleiwort BensonDataquestIDCNomura Research

Millions d’unités


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The Alcatel vision

Committed to customers, committed to Bluetooth.

Alcatel has a very single-minded philosophy that guides everything we do : listen to whatcustomers want and make communicating simple. But to achieve this is not so simple.Building user friendly technology that is also efficient is no mean task. Especially for acompany like Alcatel that refuses to compromise on design. People want a mobile they canbe comfortable with, that’s easy to use, and that makes their life easier, not morecomplicated.

Alcatel’s commitment to developing Bluetooth mobile phones is a key part of achievingthese commitments to our customers.

Alcatel is showing clear leadership and innovation in being one of the first companies tolaunch a Bluetooth phone. Even from the early days of Bluetooth, Alcatel was a card-carrying « adopter » of the Bluetooth SIG(Special Interest Group). Alcatel’s deep involvement has now elevated our status to that of« associate member ».

Bluetooth offers simplicity, efficiency, it’s practical and it’s instant. Alcatel firmly believes thatthis is what customers want.

Interoperability

The true beauty of Bluetooth will be revealed when people can witness for themselves theincredibly wide range of devices that will suddenly be able to interoperate. Alcatel isworking in close collaboration with partners from all kinds of industries. (For obviousreasons, no names are being made public yet.) They are all leading names in their fields.Everyone is racing against the clock to make Bluetooth a successful working reality.

Today, Alcatel is working with :

• A leading PCMCIA card manufacturer (to enable your PC to communicate)• A top name appliance manufacturer to develop a wireless headset to connect with your

mobile for hands free communication. (Even if your mobile is hidden in your briefcase,when it rings you can simply touch a button on the side of the headset to answer thecall.)

• Leading names behind PDAs that use Palm OS, EPOC and Windows CE for Pocket PC.

Future partnerships

Alcatel has been working for two years to build close working relationships with othercompanies that are developing Bluetooth devices or have an interest in doing so. Thisway, Alcatel will be ready before most mobile phone companies to offer the fullBluetooth experience, connecting users and their devices. Everything from digitalcameras , automotive industry Alcatel is preparing now for the foreseeable future,but also for the future nobody can yet predict. Bluetooth opens up Alcatel’s horizonsto many possible visions of the future and will leave the door open for new developments.


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Integrated design, not fussy ugly add-ons

Alcatel has adopted a design philosophy that favours beauty and simplicity. Rather thanopt for plug-ins or add-ons which deform the purity of design, Alcatel seeks an integratedapproach. Take the Bluetooth battery, for example, custom-designed by Alcatel.. It lookslike an ordinary mobile phone battery unit but actually contains built-in Bluetooth softwareand circuitry. An Alcatel phone that is compatible with Bluetooth devices will « recognize »the Bluetooth battery and is thus ready to communicate with other Bluetooth devices.

Quote also : advantage compared to integrated bluetooth is that additional cost is notincluded in the product and the end-user can choose when he wants to upgrade toBluetooth

Always connected

Once tuned in, or « bonded » to its partner device, a Bluetooth device always remainsconnected. In fact, it is as if the devices are in constant sleep-but-ready mode. Bluetoothdevices regularly exchange information to « stay in touch », constantly making sure thepartner device is there. This same interactive, interdirectional stream is what makesBluetooth so exciting. The possibilities are endless.


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How much will my Bluetooth phone cost ?

Because of steep development costs and the extremely sophisticated state-of-the-arttechnology involved, the first Bluetooth phone will be priced at the high end of Alcatel’soffering, thus addressing at first stage the well known early adopters, the techies as we callthem . Naturally as interest snowballs and uptake of Bluetooth increases, the cost willprogressively drop. Bluetooth popularity is predicted to be so high that this should happenvery quickly.

Examples of how Bluetooth will work in the real world.

The automatically organized office.

During a meeting you make various diary changes on your palmtop organizer. As youwalk back to your desk, your Alcatel-designed Bluetooth phone senses your presence byconnecting with your palmtop which is still in your pocket. Likewise, your PCautomatically synchronizes with your palmtop to get the latest diary update.

I don’t think this use case is realistic as your Phone is also in your pocket ... I would prefer :« During a meeting you make various diary changes on your Alcatel phone agendaapplication.

As you walk back to your desk, your Bluetooth phone senses your presence by connectingwith your desktop PC seamlessly synchronize your appointements with your PC/networkedagenda.

Bluetooth offers automatic, constant updates of your own relevant information every day.For practical time saving reasons and better efficiency, you may also choose to sharecertain information updates with selected colleagues. This is just part of the future ofbusiness technology. Alcatel believes it should be this effortless, this easy.

In the airport lounge.

You¹re waiting for your flight. There are delays. The most important thing on your mindisn¹t necessarily the meeting you are trying to get to, but rather, what time can you startboarding ? With Bluetooth technology, you will be able to connect with the airline’s ownflight information service for realtime departure and arrival updates. Using your Bluetoothphone, you will access this service via Bluetooth kiosks placed in strategically handy places(such as the lounge). This is the most direct connection possible, allowing you to neatlybypass the need to surf to the service via Web or phoning reservations.

Boarding a flight.

Get ready for speedy walk-through check-in. With your Bluetooth phone in your pocket, thecheck-in desk recognizes you, recognizes that you have a valid ticket and lets you boardwithout delay.


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Obtaining hard-to-get concert tickets.

Don’t have time to queue at the box office, make ten phone calls or scour the Internet ?Simply put your request online via your Bluetooth phone then get on with your life. It’s theeffortless way to bypass queues, catch last minute ticket opportunities, or bid for tickets at aprice you name. Once tickets are located by the appropriate service, you receive a textmessage on your phone. You can also use your Bluetooth phone as an instant onlinepayment facility. When you arrive at the concert, Bluetooth technology allows the box officeto recognize you, see that you have paid and immediately issue you with your physicaltickets. What a performance !

In your car.

Bluetooth technology will make sure it is you, and not an unwelcome stranger, getting intoyour car. It will allow you to start the engine, then guide you on your journey, constantlyconnecting with useful Web services and roadside Bluetooth kiosks emitting local trafficinformation. Bluetooth will be able to manage the environment within your car in a totallypersonalised way. When Mr Jones takes the car, the car « knows » he likes the climatecontrol on 21°C, prefers his seat in a certain position, and wants regular updates on trafficand gold futures. When Mrs Jones drives the very same car, the car recognizes her andadjusts things accordingly : 19.5°C, the seat slightly higher and slightly forward, andproviding regular updates on news, traffic and the Tokyo stock market.

Security, can Bluetooth keep a secret ?

Bluetooth keeps your information and Personal Area Network secure with severalsignificant advances in protective features. It¹s as close as you can get to watertight datasecurity in fact Bluetooth offers the highest degree of security effectively used in the publicdomain today.Generic Access Profile (GAP) for secure access.

The Bluetooth mobile about to be launched by Alcatel will offer up to 128 bit encryptionwhich is the one of the best, most secure in use today. To give you an idea, many of today’ssecured Web sites offer only 40 bit encryption. A credit card offers 56 bit encryption. Toestablish this security protocol (SaferPlus), the user enters the same 16 character code intoboth devices. Constant Frequency Hopping to keep strangers out.

The first time you connect devices, thus opening the communication between them, they areperfectly synchronized once and for all. With the Bluetooth system of frequency hopping at1600 times/second, any outside devices are excluded. Frequency Hopping means that theconnected devices « agree » to change from one frequency to another and back again, in aprearranged order. This precision synchronicity is the basis for security of your PersonalArea Network. It would be virtually impossible for a potential intruder to chance uponexactly the right sequence of frequencies and join in at exactly the right moment amoment being 1/1600th of a second.