All Rights Reserved © Alcatel-Lucent 2006, ##### Alcatel-Lucent Optics Division

All Rights Reserved © Alcatel-Lucent 2006, #####

Alcatel-Lucent Optics Division

All Rights Reserved © Alcatel-Lucent 20072 | Alcatel-Lucent Optics Presentation| February 2007

Agenda

1. Introduction/Overview

2. Our Vision & Strategy

3. Market Positioning

4. Solution Overview

5. Portfolio Overview

6. Customer Reference and Success Stories

7. Conclusion


1 Introduction/Overview


A Global Expertise, A Widespread Local Presence

MORE THAN… 700 Customers in 150 Countries700 Customers in 150 Countries

Best technology Best Product portfolio Massive customer references Best technology Best Product portfolio Massive customer references

218,000 MSPPs

12,300 Cross-Connects

461,500 Km Submarine Networks

34,300 WDM Systems

540,000 ADMs

One out of four optical transport equipment running in the market is from Alcatel-Lucent

One out of four optical transport equipment running in the market is from Alcatel-Lucent


Major Optics Business Customers

We have the industry’s strongest, most diversified customer base with many opportunities toup-sell into respective customer bases.

We are THE ONLY SUPPLIER with the scale, innovation and end-to-end optics solutions to effectively support and partner with the converged global carriers.

APACAPAC EMAIEMAI NANA LATAMLATAM


Locations

Paris, CalaisParis, Calais

Stuttgart, Nuremberg

Stuttgart, Nuremberg

Vimercate,Trieste,Genoa

Vimercate,Trieste,GenoaWestfordWestford

Murray Hill, HolmdelMurray Hill, Holmdel

Chengdu Chengdu

PlanoPlano

GreenwichGreenwich

Shanghai Shanghai


Organization

Optics

Romano Valussi

Optics

Romano Valussi

ManagementControl

A. Veggetti

ManagementControl

A. Veggetti

Marketing &

Communic.*

T. Goodwin

Marketing &

Communic.*

T. Goodwin

CTO

B. Nelson

CTO

B. Nelson

Operations**

A. Sciarappa

Operations**

A. Sciarappa

Quality & CustomerSatisfaction

R.Castelli (acting)

Quality & CustomerSatisfaction

R.Castelli (acting)

HumanResources

S. Magni

HumanResources

S. Magni

OMSN

S. Schiavoni

OMSN

S. Schiavoni

CrossConnects

S. Fasce

CrossConnects

S. Fasce

WDM

D. Scordo

WDM

D. Scordo

Network Release &

Products CostImprovement

R. Fechner

Network Release &

Products CostImprovement

R. Fechner

Submarine

J. Godeluck

Submarine

J. Godeluck

NAR

D. Dixson

NAR

D. Dixson

APAC

R. Lozono

APAC

R. Lozono

E&S

S. Lorenzi

E&S

S. Lorenzi

E&N

S. McCaffery

E&N

S. McCaffery

* Direct reporting to Business Group Communications for communications responsibilities** Direct reporting to Global Industrial & Logistics for industrial logistics responsibilities

Business Unit

Centr

al

Funct

ions

Pro

duct

Gro

ups

Busi

ness

Unit

Regio

nal

Support

Cente

r


2 Our vision & strategy


More Value for Our Customers

1 We can serve you better everywhere

2

We can deliver you richer optical networking solutions3

We can better help you transform your network for the future

Alcatel-Lucent brings together the widest optical presence worldwide

Alcatel-Lucent brings together the most comprehensive optical portfolio

Alcatel-Lucent brings together the best of innovation and research in optics


Our Vision, Customer advantages

Content Sharing Broadband Mobile Triple Play

Fast Bandwidth Growth

Optimized for data Highly robust Easy to manage

Cost Control

Smooth Migration to All-packet Transport

ITU-T editor for TMPLS GFP/VCAT/LCAS

innovator Leading research in

100Gb

1850 TSS: Light Reading Product of the Year

Portfolio trusted in the world’s biggest IP transformation projects

Twice the market share of nearest competitor

World leader in MSPP, optical switches and WDM

No-one is better positioned than Alcatel-Lucent to transform operators network, from any starting point, to the simplified, intelligent network of

the future

Leading the industry in standards and research

for optical packet transport networks

The best optical products in the world

The most successful optical vendor in the

world


3 Market Positioning


The World Leader in Optical Network

$0

$500

$1,000

$1,500

$2,000

2005

Rev

enue

($M

)

AlcatelLucent

Nortel Huawei Fujitsu NokiaSiemens

Cisco Nec Ericsson

ADM

MSPP

OXC

LH WDM

M WDM

Source: Dell’Oro

Alcatel-Lucent over U.S. $2 billion in optical

More than double next nearest competitor (Nortel)

2.5 times Huawei

Share leader in 4 of 5 product segments

Alcatel-Lucent over U.S. $2 billion in optical

More than double next nearest competitor (Nortel)

2.5 times Huawei

Share leader in 4 of 5 product segments


4 Solutions Overview


Solution PortfolioTM

P(t

op m

ark

eti

ng

pg)

TM

P(t

op m

ark

eti

ng

pg)

Wir

elin

e B

G

Solu

tion

sW

irelin

e B

G

Solu

tion

s

Op

tics

D

ivis

ion

Solu

tion

s

Op

tics

D

ivis

ion

Solu

tion

s

Alcatel-Lucent is leading the transformationof the transport layer toward packets

with innovative technology

Alcatel-Lucent is leading the transformationof the transport layer toward packets

with innovative technology

Network TransformationNetwork transformation is needed to serve the service revolution

Alcatel-Lucent solution enables real-time workflows and efficiencies through unprecedented

high level of network availability and reliability

Alcatel-Lucent solution enables real-time workflows and efficiencies through unprecedented

high level of network availability and reliability

Mission-Critical Communication Integrated end-to-end security and safety solutions for the vertical market

Alcatel-Lucent is massively deployingoptical networks to answer the huge capacity

demand created by video services

Alcatel-Lucent is massively deployingoptical networks to answer the huge capacity

demand created by video services

Triple Play End-to-end reference architecture and complete solution for designing and developing triple play

Alcatel-Lucent has already successfullydeployed Ethernet business connectivity

over optical networks to avoid costly overlays

Alcatel-Lucent has already successfullydeployed Ethernet business connectivity

over optical networks to avoid costly overlays

Optical Ethernet Networking solutions for the new wave of on-demand applications used by enterprises

An optimized combination of DWDM and OXC in a GMPLS environment

with integrated management to reduce TCO

An optimized combination of DWDM and OXC in a GMPLS environment

with integrated management to reduce TCO

Intelligent Optical Networks End-to-end reference architecture and complete solution for designing and developing triple play

Alcatel-Lucent can efficiently help MSPs reduce their cost of transport for the

new wave of mobile multimedia services

Alcatel-Lucent can efficiently help MSPs reduce their cost of transport for the

new wave of mobile multimedia services

Mobile Transport Backhauling and transport of mobile services over any medium (copper, air, fiber)


Optical Ethernet Services

Deliver mission-critical business Ethernet services over Ethernet-enabled optical transport combining low-cost Ethernet with the resiliency and robustness of SONET/SDH

Service-provider challenge Satisfy strong demand for E-

LINE and E-LAN business services worldwide

Provide scalable, resilient point-to-point and multipoint Ethernet services backed by strict SLAs

Economically adds Ethernet to large installed base of SONET/SDH

Global reach: deploy metro, national and international Ethernet services

Multiservice: all existing SONET/SDH features and support of legacy I/Os

Carrier-class features applied to Ethernet (SONET/SDH OAM&P, reliability and management)

Integration of Ethernet switching improves bandwidth efficiency

Access MSPP/CPE

Hub MSPP

Ethernet over SONET/SDH

Eth over Copper extensions

IP/MPLS

2004 2005 2006 2007 2009

5000

10000

15000

20000 E-LANE-LINE

$ M

illio

ns

0

Worldwide Enterprise Ethernet Services Revenue Forecast

2008Source: Ovum-RHK 2006

Packet Transport(GE/10GE/λ)) TSS

TSS

The solution Value proposition

Some references


Triple Play over Optical Network

Triple play backhauling using centralized (WDM) or distributed (MSPP, 1850TSS) aggregation solutions

SP challenge Video is creating

unprecedented capacity demand in the Metro networks

Carrier-grade

Assured service availability and reliability

Operational efficiency with fast provisioning and reduced troubleshooting

Support of unicast, multicast (IGMP)

and broadcast traffic

Widely deployed solutions

For fixed op., cable op. and TV broadcasters

WDM or SONET/SDH

More than 30 major deployment so far


Some references

6x

Private Lines

Voice

Video Distribution

BB Internet Access SMEs

BB InternetAccess Residential

Data Services

Centralized

Distributed

MetroWDM

MSPP1850TSSL2 aggregation

close to the access sites

Transparent transport up to the central site

50%

10%3%

7%

24%

6%

2005

25%

27%

2%

11%

4% 2008

31%

Video


Optical Mobile Transport

Switching site

Switchingsite interconnect

2G 2.5G 3G HSPA

Optical transport for backhaul and core networks to efficiently handle rapid growth of data services

MSP challenge Sharp rise in bandwidth

intensive services

Need to reduce the cost of transport to stay profitable

Leading portfolio, strong expertise in mobile market

Reference with major MSP all around the world

Clear migration path towards packets

Ethernet already supported today in MSPPs and WDM

Unique migration scenario to full packet with 1850TSS


Some references

Revenue

Capacity

b/s€

WiMAX

2G

3G TDM grooming ATM, Eth aggregation

Backhaul

Backbone

IP/MPLS

MSCSGSN

Controller

TSS


Intelligent Optical Networks

An optimized combination of DWDM and OXC in a GMPLS environment with integrated management

SP challenge Operators seek to extend the

performance and improve the efficiency of their existing networks, minimize operating costs, and add new capabilities to meet customer demands without making major capital investments

Intrinsic awareness of network resources, i.e. topology, network inventory improves resource allocation

Simplifies provisioning and speeds provisioning cycle

Enables service activation with service aware resource management and QoS to maintain end-end SLAs

Improves Multi-Vendor Interworking via E-NNI

Dynamic bandwidth management helps pave the way for new services – such as Ethernet-on-demand


Some references

OC-NSTM-N

UNI or E-NNI

CustomerPremises


5 Portfolio Overview


Portfolio Strategy

Alcatel-Lucent optics portfolio fits inside the long-term vision of all-packets transport Scalable multiservice platforms enabling optimized transport of data Evolution path towards full packet and transparent photonic networks

Data

Cap

acit

yFeatu

re r

ich

ness

SONET/SDH ringsDCS

WDM pt-to-pt

SONET/SDH ringsDCS

WDM pt-to-pt

< 2000 > 2010

Key drivers• Capacity• Performance• Reliability

Key drivers• Service assurance• Bandwidth

optimization• Automation

Key drivers• Convergence• Operational

efficiency• Availability

NG-SONET/SDHION

ROADM

NG-SONET/SDHION

ROADM

Full-packet transportTransparent photonicsFull-packet transport

Transparent photonics

today


Transition Strategy & Customer Support

The Alcatel-Lucent product portfolio fits inside the long-term vision of all-packettransport Scalable multiservice platforms enabling optimized transport of data Evolution path towards full packet

The Alcatel-Lucent product portfolio will transition considering The synergies and overlap between the Alcatel and Lucent products The installed base The current customer commitments The forecasts for each product The market demand The best, continued support to our existing customers – minimizing disruptions

and allowing co-existence, if necessary

Fulfillment of existing customer commitments for feature development Analysis of new development requirements Elaboration of customer evolution strategy


Photonic Portfolio at a Glance

• 96 wavelength at 10 Gb/s, upgradable to 192 channels • Optimized configurations from regional to pan-continental networks

Leading-edge technology• ROADM, 40 G, G.709 support• Best-in-class footprint and power

consumption

• Combined 8-wavelength CWDM/32-wavelength DWDM system in one platform

Modular platform• Compact or Central Office shelf• Best-in-class footprint and power

consumption

• 8-wavelength CWDM system, ready for 16 wavelength

Carrier-grade platform with low cost technology • High performance • Abundant protection options

• Best-in-class footprint and power consumption

• Traffic concentrators, colored plug-ins

Highly successful platforms : > 50 customers in LH WDM, > 100 customers in Metro WDM

• Easy and fast installation and commissioning

• Traffic concentrators, colored plug-ins

1626 Light Manager - Multireach DWDM platform

1696 Metrospan - Mixed CWDM/DWDM platform for carrier-grade Metro networks

1692 Metrospan Edge - Stand-alone CWDM system


Aggregation Portfolio - ETSI

Metro CPE STM-1/4, TDM, EthernetMetro CPE STM-1/4, TDM, Ethernet

Metro Access STM-4, TDM, Ethernet, ATM, SHDSL, DVB-ASIMetro Access STM-4, TDM, Ethernet, ATM, SHDSL, DVB-ASI

Metro STM-16, TDM, Ethernet, ATM, CWDM,SHDSL, DVB-ASI

Metro STM-16, TDM, Ethernet, ATM, CWDM,SHDSL, DVB-ASI

1650 SMC

1660 SM

1662 SMC

1642 EM/EMCMetro RegionalSTM-64, TDM, Ethernet, ATM, CWDM,SHDSL, DVB-ASI

Metro RegionalSTM-64, TDM, Ethernet, ATM, CWDM,SHDSL, DVB-ASI

Metro CPE STM-1/4, TDM, Ethernet, SHDSLMetro CPE STM-1/4, TDM, Ethernet, SHDSL

AM/AMS

Integrated Service Adapters Ethernet/MPLS switching, ATM switching, SHDSL, DVB-ASI

Integrated Service Adapters Ethernet/MPLS switching, ATM switching, SHDSL, DVB-ASI

ISA Boards

The first MSPPs on the market, and by far the best-selling in the ETSI world The widest variety of service interfaces for any data service The first MSPPs on the market, and by far the best-selling in the ETSI world The widest variety of service interfaces for any data service


Aggregation Portfolio - ANSI

Metro AccessOC-3/12/48, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, DS1/DS3

Metro AccessOC-3/12/48, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, DS1/DS3

Metro Core OC-3/12/48/192, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, TransMUX, DS1/DS3

Metro Core OC-3/12/48/192, Ethernet, Gigabit Ethernet, FICON/FC/ESCON, TransMUX, DS1/DS3

Industry’s First Standards-based GFP and VCAT

deployment Standards-based RPR deployment Standards-based FCBB3 for

storage area networking (SAN) distance extension

Mine new revenue opportunities

TDM, Ethernet, RPR, SAN on same platform

Metro CPE OC-3/12, 10/100 Ethernet, DS1/DS3 Metro CPE OC-3/12, 10/100 Ethernet, DS1/DS3

DMXplore

DMXtend

DMX


Maintained Products & ROADM

• Continuing to support existing customers with ultra long-haul networks over 2,600 km

Very specialized networks • Very high-capacities over very long spans (up to 4,000

km)

• Continuing to support existing customers commitments• Co-existence with the 1696 Metrospan in the very near term for specific

applications

LambdaXtreme

ADMs and 167 7 SL

• Fulfillment of existing customer commitments for future development • Analysis of new development requirements • Elaboration of customer evolution strategy

WSM

Metro ROADM

• We will continue to support existing customers commitments, products and requirements until decision on the long-term strategy is made

Emphasis on minimal customer disruptions and products co-existence, if necessaryEmphasis on minimal customer disruptions and products co-existence, if necessary


Multiservice optical platform purpose-designed for all-packet transport

Unique, innovative universal switch Fully scalable Ethernet/MPLS, SONET/SDH and

WDM mix in one box Enhanced by UPM development

IP transformation enabler Smooth transition from TDM to all-IP packet

transport Full 100% packet configurations supported

Secure investment Start anywhere, get anywhere to match any

transport need today and in future Freedom in planning transport network

resources Interoperable with Alcatel and Lucent SDH

networks

Top market recognition More than 30 customer

contracts and lab trials worldwide

“Best New Product” Awards MEF certification

1850 Transport Service Switch (TSS)

1850 Transport Service Switch (TSS) Global Next Generation Aggregation

Ethernet/MPLS

TDM

WDM3 separate platforms

1 purpose-builtconvergence platform

UniversUniversal al SwitchiSwitchingng


Cross-Connect Portfolio

1678 MCC LambdaUnite 1671 SC

PacketSwitching

Broadband OCS

Broadband OCS

Wideband DCS

Wideband DCS

Narrowband DCS

Narrowband DCS

PacketSwitching

Switch Switch

Broadband OCS

Broadband OCS

Wideband DCS

Wideband DCS

PacketSwitching

Switch Switch

Broadband OCS

Broadband OCS

Wideband DCS

Wideband DCS

640 G capacity in half-rack 160 G to 640 G switch

capacity ASON/GMPLS control plane Optical transport network

(OTN) Scalability to 2.5T Layer 2 aggregation

Market-leading OXC 160 G to 640 G switch capacity ASON/GMPLS control plane Scalable to 1.3T ASON/GMPLS control plane

240 G WB matrix (SONET) GMPLS-ready Packet switching

(MPLS/Ethernet) Narrow-band DS0 Groomer Transmux Wide range of SONET

interfaces


NMS Portfolio

Alcatel1350 MSAlcatel

1350 MS

LucentOMS

LucentOMS

Alcatel-Lucent 1350 OMS

Newdevelopment

s and products

Newdevelopment

s and products

1350 MS + OMS

Compatible with the way networks are operated today with 1350 MS and 1350 OMS

Evolution from installed base

Interoperable with Wireline NMS portfolio (access and IP)

No disruption in

operations

Both OMS and 1350 MS continued support for all current products

Alcatel equipment

still in the newportfolio

• OMSN• 1850 TSS• 1678 MCC• 1626 LM• 1696 MS• 1692 MSE

Alcatel equipment


• OMSN• 1850 TSS• 1678 MCC• 1626 LM• 1696 MS• 1692 MSE

Lucent equipment


• LambdaUnite• DMX• AM/AMS

Lucent equipment


• LambdaUnite• DMX• AM/AMS


6 Customer Reference and Success Stories


Deutsche Telekom – SDH2000+

Infrastructure based on Alcatel and Lucent

DWDM and SDH 14 single-vendor regional and

2 backbone networks

The challenge Centralized configuration and fault

management across multiple domains in a multi-vendor and multi-technology environment

The solution: OneVision® Centralized end-to-end solution for

managing transport network

28 000 NE under management

720,000 monitored SDH paths

The benefits Faster provisioning of services

Simplification of operational workflow

Rapid fault localization

Optimization of network utilization

Alcatel

Lucent

Alcatel RegionalNetworks

Lucent

BackboneNetwork

12,000 NE 10,500 OMSN 300 Cross-Connects 440 DWDM

16,000 NE 15,200 SDH 540 Cross-Connects 270 DWDM

SDH2000+ NETWORK


Mobile Backhaul Aggregation / Mobile Backbone Transport

Reduce mobile backhaul leasing costs

Prepare national rollout of a 3G CDMA2000® 1xEV-DO mobile high-speed data network

Reduce mobile backhaul leasing costs

Prepare national rollout of a 3G CDMA2000® 1xEV-DO mobile high-speed data network

Business Advantages

Challenges

Solution

LambdaUnite MSS and Metropolis DMX

Avoid expense of leasing fiber and facilities from other companies

Add the capacity and reliability for high speed data network

LambdaUnite MSS and Metropolis DMX

Avoid expense of leasing fiber and facilities from other companies

Add the capacity and reliability for high speed data network

Prepares network for Ethernet enabled BTS equipment

Adds transport flexibility and increased capacity

Supports broadband and wideband grooming functionality to efficiently aggregate traffic

Prepares network for Ethernet enabled BTS equipment

Adds transport flexibility and increased capacity

Supports broadband and wideband grooming functionality to efficiently aggregate traffic

• DS1/DS3/OC-3/12/Ethernet support

• Traffic Grooming (3/1 Cross Connect)

• Cost effective

• Small footprint


Sea-Me-We 4 – Submarine Optical Network

Links 14 countries from France to Singapore

16 landing points

Alcatel products

1620 LM

1626 LM 1678 MCC

1350 management suite

Comprehensive set of services

Marine and terrestrial installationcommissioning and integration1620 Light Manager

• Submarine Line Terminal Equipment (SLTE)• Designed for high-capacity repeatered submarine cable

systems• 192 x 10 Gbit/s channels

20,000 km, more than 32 times the initial capacity of the Sea-Me-We 3 system

Prime benefits: delivers a new Terabit cable supporting huge data growth, leased line and broadband services


7 Conclusion


Conclusion

Optical networks are under transformation

IP bandwidth growth fuelling Photonic and Packet Transport

Alcatel-Lucent is the strategic partner

A strengthened position in every geographic segment

The very best portfolio in the industry

A cutting-edge innovation with roots in the best worldresearch labs

Experience of major IP network transformation projects

Documents

All Rights Reserved © Alcatel-Lucent 2006, ##### Alcatel-Lucent Optics Division