Alcatel applauds start of the Galileo Project

Paris, France – As a shareholder and a founding member of Galileo
Industries, Alcatel (Paris: CGEP.PA and NYSE: ALA) today applauds the
contract signature of the first industrial phase of Galileo, the European
satellite navigation system, between Galileo Industries* and ESA (European
Space Agency). This contract marks one of the most important and strategic
milestones for Europe and the beginning of the implementation of the
Galileo program with the In-Orbit-Validation phase.

Alcatel Alenia Space is a leading contributor and is in charge of
developing the ground mission segment, the satellite and system integration
as well as critical equipment provisioning. The key elements provided by
Alcatel Alenia Space will ensure the outstanding and guaranteed performance
of services delivered to the end-users.

The contract was signed today in Berlin at the Ministry of Transport by
Giuseppe Viriglio, director of EU and industrial programs at ESA and Gunter
Stamerjohanns, CEO of Galileo Industries, in presence of Wolfgang
Tiefensee, German Minister of Transport; Serge Tchuruk, Chairman and CEO of
Alcatel and the leaders of the other Galileo Industries shareholders as
well as representatives of the European and national space agencies.

Serge Tchuruk underlines: “Only a unified Europe made Galileo possible and
in return Galileo now makes Europe an even stronger reality. Galileo will
open up numerous business and job opportunities for small and large
companies as well as for new start-ups across Europe”. He added: “Alcatel
is the only contributor to Galileo that combines both, infrastructure and
downstream solutions in the mobile telecommunications and transportation
markets worldwide. I am therefore, more than anyone else, committed to
provide Alcatel skills and expertise to make infrastructure performance
match with market expectations. To that extent, Alcatel is proud to share
the leading role in Galileo.”

*Galileo Industries is a joint company of Alcatel Alenia Space, EADS
Astrium GmbH and EADS Astrium Ltd, Thales and Galileo Sistemas y Servicios
(GSS), a consortium of 7 Spanish companies.

About Alcatel Alenia Space

Alcatel Alenia Space is the European leader in satellite systems, at the
forefront of orbit infrastructures. Created in July 2005, the company
brings together the vast experience and know-how of Alcatel Space and
Alenia Spazio to form a new leading force in European space technology.
Alcatel Alenia Space represents a worldwide standard for space development
that impacts everybody’s future: from navigation to telecommunications,
from meteorology to environmental monitoring, from defence to science and
observation. Alcatel Alenia Space is an affiliate of Alcatel (Paris:
CGEP.PA and NYSE: ALA) (67%) and Finmeccanica (Milan:SIFI.MI, FNC.IM)
(33%).

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.