News release

Alcatel Canadian Train Control Technology Selected

for $650 Million London Subway Contract

Long-term contract stimulates job growth at Alcatel

Canada Transport Solutions Division

TORONTO, October 2, 2003 – Alcatel (NYSE: ALA), today announced that its Transport Solutions Division (TSD), a world leader in advanced urban rail train control systems, has received a contract from Tube Lines to re-signal London’s Jubilee and Northern rail lines. Tube Lines is responsible for upgrading and maintaining this major segment of London’s Underground.

Valued at CAD $650 million, the contract includes production and installation of the Alcatel SelTrac S40 communications-based train control system developed and engineered in Canada, and an option to re-signal the Piccadilly line with design work starting in 2005. The massive improvement project is expected to take more than seven years to complete and stimulate significant job growth at Alcatel’s Canadian-based TAS facilities in Toronto; and Burnaby, B.C.

The oldest and one of the largest subway systems in the world, London’s Tube requires significant overhaul and upgrading to accommodate growing passenger demand. Generic design work to enable both Jubilee and Northern Line schemes will commence immediately. Once deployed, Alcatel’s sophisticated signaling system and central control equipment will enable London Underground operators to optimize the number and the operations of the trains. For passengers, this will mean trains running more reliably and safely at higher speeds, leading to a more frequent and less crowded service.

Created by software and hardware engineers based in Canada, Alcatel’s advanced SelTrac S40 train control system provides safe, reliable short headway between trains for improved throughput and passenger service. The technology is upgradeable and provides for greater operating and maintenance efficiency. SelTrac® has been chosen by more than 20 metro operators worldwide, including TTC (Scarborough RT), BCRTC (Vancouver SkyTrain), NYCT (New York), Docklands Light Rail (London, UK), RATP (Paris), KCRC and MTRC (Hong Kong), Guangzhou and Wuhan (China) and KNR (Seoul, Korea).

“Today’s announcement is tremendous news for the 900,000 people who every day rely on the Jubilee and Northern lines and who deserve a service that is reliable and efficient,” said Terry Morgan, Chief Executive, Tube Lines. “This project will enable a 20% improvement to the capability of the Jubilee and Northern lines leading to a more frequent and less crowded service.”

“Alcatel is working closely with Tube Lines to help ensure London’s Tube improvement initiatives result in a transportation system that is second to none,” said Hubert de Pesquidoux, CEO, Alcatel Canada. “The mass transit industry is experiencing rapid, global growth and with our made-in-Canada technology Alcatel continues to lead the competition in high-capacity train control systems.”

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About Tube Lines

Tube Lines is responsible for the maintenance and upgrade of the infrastructure on the Jubilee, Northern and Piccadilly lines, while London Underground is responsible for operating the Underground, for employing drivers and station staff, for ticketing and fares, and for the Tube's safety.Tube Lines is a consortium consisting of Amey, Bechtel and Jarvis, and brings together some of the most experienced providers of business services with specialist skills in the rail industry, including track and signal upgrades, plus project and operational management. Tube Lines provides some of the best project and operational managers from around the world to work on the modernization of the tube system. For more information, http//www.tubelines.com

About Alcatel

Alcatel provides end-to-end communications solutions, enabling carriers, service providers and enterprises to deliver content to any type of user, anywhere in the world. Leveraging its long-term leadership in telecommunications network equipment as well as its expertise in applications and network services, Alcatel enables its customers to focus on optimizing their service offerings and revenue streams. With sales of Euro 16.5 billion in 2002, Alcatel operates in more than 130 countries. Alcatel Canada headquarters are located in Ottawa. For more information, http://www.alcatel.com

About Alcatel TSD

Alcatel Canada’s Transport Solutions Division (TSD), Canada’s premier advanced train control system designer and manufacturer, is based in Weston, Ont., and Burnaby, B.C. Part of Alcatel’s global Transport Solutions Division, the Canadian division has played a significant role in establishing Alcatel as a market leader in advanced urban rail train control technology with 23 global customers using SelTrac solutions. North American customers include Vancouver’s SkyTrain, the Toronto Transit Commission’s Scarborough LRT, Walt Disney World’s monorail, Detroit’s downtown people mover, San Francisco’s MUNI, Las Vegas’ monorail, and international airport people movers at Tampa, Newark, and JFK. For more information, http://www.alcatel.com/tas

Alcatel press contact

Amy MacLeod/ Alcatel Canada / 613 784 1980 /

Alcatel Investor Relations

Claire Pedini / 33 1 40 76 13 93 /
Laurent Geoffroy / 33 1 40 76 50 27 /
Pascal Bantégnie / 33 1 40 76 52 20 /
Peter Campbell / 33 1 40 76 13 11 /
Charlotte Laurent-Ottomane / 703 668 3571 /