Alcatel-Lucent Provides Preliminary Unaudited Results for First Quarter 2007

Alcatel-Lucent Provides Preliminary Unaudited Results for First Quarter 2007

As Expected, Soft Revenues in the First Quarter, at Around Euro 3.9 Billion, a Year Over Year Decline of (8)% at Constant Euro/USD Exchange Rate

- Adjusted Operating Income (Loss) (1) of Approximately Euro (260) Million, Half of Which is Attributed to Significant Items

- Strong Momentum in Order Flow With a Book to Bill at 1.3x at the end of the Quarter

- Integration Plans on Track With 1,900 Headcount Reduction in Quarter

Alcatel-Lucent (Euronext Paris and NYSE: ALU) today announced its preliminary results for first

quarter 2007 adjusted results and provided an update on its integration process and business activities.

Patricia Russo, CEO of Alcatel-Lucent said: “It has been four months since we completed the merger, and we are making good progress in terms of our integration. The technology choices have been finalized and the combined company’s portfolio communicated to our customers. Concerning our cost saving plans, the net headcount reductions, before recently announced managed services contract wins, are approximately 1,900 during the quarter, 15% of the 3-year target of 12,500. Associated cost savings will be incorporated in our operating results going forward.

As previously stated, we anticipated that some of the factors which affected our business in the fourth quarter 2006 would continue in the early months of the year leading to some revenue decline. In particular, while parts of our businesses performed well, our first quarter results were impacted by lower volumes in traditional wireless and core networks at a time when considerable investments were made in the next generation of these technologies.

We continued to gain sales momentum during the quarter and increasingly recognized the benefits of our integration. At the end of the quarter, our book to bill stands at 1.3x, which leads us to remain confident in our ability to resume growth as the year progresses. In fact, we have announced a number of contracts during the quarter, including the USD 6 billion deal with Verizon Wireless, which represents one of the first major success stories reflecting the combined company’s strengths. We also signed a new strategic UMTS/HSPA contract with SFR in France, the first in Western Europe since the acquisition of the 3G UMTS radio activities of Nortel. Additionally, China Mobile selected Alcatel-Lucent and its partner Datang for its 3G/TD-SCDMA network. These wins speak to the portfolio decisions we have made and the relationships we continue to enjoy with some of the world’s largest service providers.