Paris, November 24, 2005 - Alcatel (Paris: CGEP.PA and NYSE: ALA) announced today the signing of a contract with SMARTS, a leading regional mobile operator in Russia for the delivery of Alcatel mobile solutions to extend SMARTS GSM/GPRS network in the Povolzhie region.

Thanks to the implementation of this project, SMARTS will be able to optimize its existing mobile infrastructure, to double its networks subscribers' capacity in the cities of Kazan and Saratov, to improve the quality of communication and to accelerate the deployment of new mobile broadband services, such as video streaming, MMS and high speed Internet access.

Under the term of the contract Alcatel will deliver its industry-proven Evolium® GSM/GPRS/EDGE radio access solutions, including all elements of the Base Station Sub-system (BSS). Alcatel will also deliver capacity extension of Alcatel Evolium® Mobile Switching Center (MSC).

Gennady Kirushin, general director of ZAO SMARTS, commented, "Thanks to our long-lasting cooperation with Alcatel we are positioned as one of the leading mobile operators in the region. The implementation of this project will enable us to further extend our network capacity and deliver high-quality mobile services to meet the rapidly increasing demand of our customers. Alcatel state-of-the-art solutions will enable us to optimize CAPEX, decrease OPEX and receive a quick return on investment, which is a key factor for a fast growing operator such as SMARTS."

Alexander Mikoyan, President of Alcatel's activities in Russia has added: "We have been partnering with SMARTS for several years already and have always tried to deliver solutions that are optimized both technically and financially. We are glad to support SMARTS in this new project, which will further strengthen the operator's position in the fast growing Russian mobile market. Alcatel is committed to bringing the most advanced technological solutions to its partners in Russia in order to enable the deployment of broadband mobile services in the country."

Alcatel's presence in the Russian Federation is steadily evolving with equipment being currently installed in more than 40 cities. Today, Alcatel is one of the leading suppliers for Russian mobile infrastructure.

Alcatel's Evolium® multi-standard platform natively integrates all GSM-based mobile technologies, from GSM/GPRS to EDGE, 3G/UMTS and HSDPA, and allows all solutions in one single equipment, for a smooth upgrade of existing networks.

About SMARTS
SMARTS (Middle Volga interregional Association of radio-telecommunication systems), one of the leading Russia's mobile operators, was founded in 1991 and offers GSM900/1800 mobile communication services to its more than 2,6 million subscribers. Currently SMARTS's network covers 16 regions of Russia, including Astrakhanskaya, Volgogradskaya, Ivanovskaya, Orenburgskaya, Penzenskaya, Samarskaya, Saratovskaya, Ulyanovskaya and Yaroslavskaya regions; Bashkortostan, Kalmykia, Maryi-El, Mordovia, Tatarstan and Chuvashia Republics and Krasnodarsky region's territory. http://www.smarts.ru

About Alcatel
Alcatel provides communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or employees. Alcatel brings its leading position in fixed and mobile broadband networks; applications and services, to help its partners and customers build a user-centric broadband world. With sales of EURO 12.3 billion and 56,000 employees in 2004, Alcatel operates in more than 130 countries .