1. DSL Markets and Offerings ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003 ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003

2. DSL Markets ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003 ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003

3. All rights reserved © 2002, Alcatel 0 20 40 60 012010080604020 Years since introduction % of Households (US) Automobile 1886 Telephone 1876 Electricity 1873 Television 1926 Radio 1905 VCR 1952 Internet 1975 Source: Michael Fox and Forbes Magazine, Morgan Stanley Broadband Access experiences unprecedented Growth 70% 30% 80 100% Broadband Access 1995 100% broadband  When there is no other option  Broadband is defacto 2010 = 70% broadband  Price of broadband access lower than dial-up  Entertainment: gaming, streaming (MP3, MPEG4)  Adopted by the lean-back audience (TV only users) 2005 = 30% broadband Primarily for lean-forward audience (PC-based market)

4. All rights reserved © 2002, Alcatel Broadband Access is about... …..Broadband will usher in a behavioural shift not seen since the introduction of home electrification 100 years ago”. Chris Anderson The Economist (Home on the Net - The World in 2001) Broadband Access… is about riding the wave of an exciting business changing people’s lives DSL users would rather be without their… remote controls (87%), their VCRs (81%), their cable television (70%), their morning coffee (63%) even their garage-door openers (59%) before giving up their DSL connections* DSL can be addictive…

5. All rights reserved © 2002, Alcatel Broadband penetration in US, Europe and Korea > Korea has reached 30% broadband penetration in 2001with 7.8 million users. 1999200320042005200120022000 Source: Morgan & Stanley

6. Testimonials – DSL strategy ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003 ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003

7. All rights reserved © 2002, Alcatel Europe : Swisscom DSL strategy and business model > Broadband acceleration cements our market position (Jens Alder - CEO)

8. All rights reserved © 2002, Alcatel Europe : Telefonica – DSL business status

9. All rights reserved © 2002, Alcatel Europe : Telecom Italia

10. DSL Offerings ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003 ITU/BDT Arab Regional Workshop on “DSL Technologies and Services” Cairo - Egypt, 4-6 March 2003

11. All rights reserved © 2002, Alcatel High Speed Internet Access Wholesale versus Retail Service providers Access providers End users ASAM Mini-RAM... ADSL-NT... Service management Service Gateway ATM or FR pipes IP-tunnels Wholesale (Revenue Split) Retail (Revenue Split) Global package fee to ISP Access fee to AP Global package fee to AP (incl. Internet Access)

12. All rights reserved © 2002, Alcatel Customer Proposition Simplify the Customer Decision Tree Business Packages Service Package Residential Step-in Residential + CPE ADSL router Ethernet Bridge (PPPoE) USB DIY Cabling Cabling + PC Installation X 5 X 10

13. All rights reserved © 2002, Alcatel Some step-in service packages and step-in pricing Converging across Europe > Peak rate: 512Kbps-1MKbps down, 128K up > Download flat rate volume cap: 10GB > Single session PPPoX, single variable IP address > Intelligent geo-marketing ~ 40 € 36 €39 €37.7 € 38 €

14. All rights reserved © 2002, Alcatel Telecom Italia

15. All rights reserved © 2002, Alcatel Belgacom (Service Packages and tariff model) > For customers that exceed their monthly traffic volume, Belgacom asks them to move to a higher volume package, although few customers are in this position. The company does not actually bill customers that exceed their volume limit, for reasons of cost and complexity.

16. All rights reserved © 2002, Alcatel Korea Telecom – DSL highlights > Broadband growth drivers Government investment ($231M for 2001) Education: Internet connectivity in schools Proliferation of Internet cafes Densely populated cities (60% MDUs) > Korea Telecom simple service packaging and aggressive pricing ADSL-Lite (2 Mbps / 256 Kbps) priced at 25 € per month ADSL-Multi IP (2 Mbps / 512 Kbps with 5 IP address priced at 150€. On the other hand, 15 % discount is offered for a 3 years contract > Efficient truck roll-out 10 – 15 subscriber installed per day per technician > Korea Telecom (Internal organizational activities) Simple internal process and reduced activation times Shared commitment to be number 1 player against severe competition Customer need base marketing: sales promotions towards schools (on- line gaming) and towards housewives (on-line shopping)

17. All rights reserved © 2002, Alcatel DSL Cumulative Shipments (Ports) — Worldwide Dell’Oro: February 2003 Alcatel has shipped a total of 23.5M DSL lines at end of 3Q 2002 Over 4 times that of its nearest competitor 23.5M

18. All rights reserved © 2002, Alcatel Alcatel Leads the Way!  Hanaro  Korea Telecom  Telstra  Jiangsu PTA  Shanghai PTA  Beijing PTA  China Telecom  Guandong PTA  HongKong  TMS  Singtel  CHT Taiwan  EBT  Coara  Digitel  Bharti  Telecom NZ  SBC  Bell South  Bell Canada  Verizon  Qwest  Sprint  Telus  Aliant  Telefonica Brazil  Telefonica Argentina  Telefonica Peru  Telefonica Chilie  Telmex  Telemar Brazil  Telecom Brazil  Caribe  Cantv  ETB Colombia  Entel Today, More than 72 Customers in Over 40 Countries  Arcor  KPN  BT  Telecom Italia  Wind Infostrada  Telecom Austria  Telefonica  Belgacom  FT  Net Cologne  M-Net  Tesion  Telenor  Telia  Swisscom  Kingston  Eircom  Maroc Telecom  Portugal Telecom  ONI  Colt  Cesky Telecom  TT Net  TPSA  Bezeq  STC

19. All rights reserved © 2002, Alcatel Strategy > Overall business objectives > ROI, NPV, payback periods > Market forecast > Technology positioning > Service delivery models > Increasing ARPU Operations > Self-install packages > Help desk > Provisioning > Front office > Business case sensitivities > Customer acquisition cost Marketing > Segmentation > Price sensitivities > Point of sales strategy > Sales channels > Basics (advertisement,...) > Service bundling Organizations > Internal process > Organizational structure > Cannibalization effects Fast Forward – DSL Business Consultancy at All Levels > Diagnosis of existing DSL business situation > Local market analysis and market segmentation > Business case development and sensitivity analysis > Product development and service bundling > Actionable recommendation for implementation

20. www.alcatel.com