Alcatel-Lucent Introduces IPTV Solution for Underserved Smaller Regional Markets Based on Microsoft's Mediaroom

Cinergy MetroNet Selects the Solution to Offer Feature Rich IPTV Services to Customers in Indiana

PARIS, July 22, 2010 - Alcatel-Lucent (Euronext Paris and NYSE: ALU) today unveiled a turnkey,
compact IPTV solution, powered by Microsoft Mediaroom, that is designed to
cost-effectively support networks of between 1,000 and 100,000 set-top-boxes.
The solution not only provides high-quality television programming, but also
enables new consumer media services through the blending and personalization
of web and broadcasting content. This new offer, which uses a single
equipment rack, supports more than three times as many households than
previous versions of the Microsoft Mediaroom-based IPTV solution.

Cinergy MetroNet is the first customer to use the solution and
will begin offering Alcatel-Lucent-powered IPTV services to six cities in
Indiana, reaching approximately 50,000 potential customers beginning July 26,
2010.

The Alcatel-Lucent IPTV offer, called the Integrated Solution
for Microsoft Mediaroom (
www.alcatel-lucent.com/wps/portal/Solutions/detail?LMSG_CABINET=Soluti
on_Product_Catalog&LMSG_CONTENT_FILE=Solutions/Solution2_Detail_000237.xml),
is a substantially modified version of an existing solution that
Alcatel-Lucent has previously deployed in more than 25 [large] networks
globally. The system uses Internet protocol (IP) technology to transmit the
television signals and, thanks to the power and flexibility of IP, enables
carriers such as Cinergy to offer a variety of new services.

"The needs of operators serving smaller customer bases are
unique because they often don't need large multi-rack solutions," said Vince
Vittore, principal analyst for Yankee Group. "Alcatel-Lucent's approach to
this market is unique because it combines a great user experience with a
reasonable price point and leverages its experience as a video integrator."

How the solution fits with Cinergy MetroNet needs?

This new Integrated Solution is designed to meet the cost
requirements of regional communication service providers (CSPs) such as
Cinergy MetroNet who serve local and regional markets.

"We want to provide our customers superior service and access
to such capabilities as WholeHome DVR, interactive applications and
over-the-top content," said John Cinelli, CEO of Cinergy MetroNet.
"Alcatel-Lucent's IPTV solution fits our business needs and gives us a
powerful, flexible, and differentiating tool to deliver IPTV-based services
to our customers."

Cinergy MetroNet plans to offer its customers multimedia
services such as broadcast TV blended with web content; the ability to
simultaneously record multiple shows while watching another; and the delivery
of personalized content such as weather, traffic and news.

About the new Integrated Solution for Microsoft Mediaroom
(www.alcatel-lucent.com/wps/portal/Solutions/detail?LMSG_CABINET=Solut
ion_Product_Catalog&LMSG_CONTENT_FILE=Solutions/Solution2_Detail_000237.xml)
release

"Operators who support from 1,000 to 100,000 set-top-boxes are
underserved when it comes to IPTV and next generation multimedia services,"
said Geeta Chaudhary, vice president of Alcatel-Lucent's Multimedia
Integration Services group. "To address this need we created an optimized
IPTV solution that is pre-integrated and lab tested, minimizing the technical
and commercial risks associated with launching IPTV services. We estimate
that more than 11 million new IPTV subscribers will be served by regional
communication service providers in the coming three years and this compact
release is designed to help our customers better address this huge
opportunity"

In this release of the solution, Alcatel-Lucent has integrated
innovative technology from Microsoft and HP. Some key features of the new
solution:

    - The solution, based on Microsoft's Mediaroom Hyper-V
      architecture, includes a unique design integration by Alcatel-Lucent
      that more than triples the number of set-top-boxes supported in a
      single deployment and reduces the number of servers needed.
    - This solution is further optimized when deployed on HP
      BladeSystem with HP Virtual Connect(TM) technology, reducing the
      complexity of the architecture and increasing flexibility to respond to
      change in workload demands.
    - The small physical footprint means a much "greener"
      deployment with reduced overall energy and operating costs.
    - Pre-tested in Alcatel-Lucent's end-to-end IP Transformation
      Center (IPTC) laboratories, resulting in reduced technical risk and
      improved time to market by as much as 30%.

Alcatel-Lucent also supports regional communications service
providers with a host of IPTV consulting services such as: end-user insight,
demand analysis, IPTV services definition and launch as well as the
end-to-end management.

The micro-architecture: Alcatel-Lucent Integrated Solution for
Microsoft Mediaroom supports Alcatel-Lucent's Multimedia strategy
(www.alcatel-lucent.com/multimedia/), which is focused on providing an
enriched multi-media experience for end users, driving subscriber growth,
customer retention and new revenues.

About Cinergy MetroNet

Cinergy MetroNet, Inc. provides enhanced communications via
its all-fiber, optic network services to homes and businesses. Cinergy
MetroNet's services include local and long distance telephone, high-speed
Internet access and the latest in digital cable television technology.
Through its fiber optic infrastructure and services, Cinergy MetroNet
improves the quality and the communities it serves.

About Alcatel-Lucent Multimedia Integration Services

Alcatel-Lucent Multimedia Integration is the market leader in
the design, integration and deployment of IPTV networks and applications.
Leveraging years of experience, broad expertise and extensive investments to
develop proven methodologies, Alcatel-Lucent Multimedia Integration delivers
world-class, end-to-end multimedia services that are reliable, scalable and
secure with reduced time to market. Alcatel-Lucent provides middleware
solutions that support more than 5 million IPTV subscribers, representing
more than 18 percent of all IPTV subscribers worldwide. The company is also
involved in more than 55 triple play service delivery architecture (TPSDA)
deployments and more than 60 IPTV transformation and integration projects.
These transformation projects leverage Alcatel-Lucent's extensive field
deployment experience and lab investments in next-generation IP
Transformation Centers (IPTCs) and dedicated IPTV Network Solution
Integration & Testing lab (NSIT) to reduce time to market and mitigate
deployment risk. For more information on Multimedia Integration Services
please click follow this link:
www.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM
0Y_QjzKLd4w3dnTUL8h2VAQAvhWwcA!!?LMSG_CABINET=Solution_Product_Catalog&LMSG_C
ONTENT_FILE=Solutions/Solution2_Detail_000051.xml

(Due to the length of the URLs, it may be necessary to copy and paste
the hyperlink into your Internet browser's URL address field. Remove the
space if one exists.)

About Alcatel-Lucent

Alcatel-Lucent (Euronext Paris and NYSE: ALU) is the trusted
transformation partner of service providers, enterprises, strategic
industries such as defense, energy, healthcare, transportation, and
governments worldwide, providing solutions to deliver voice, data and video
communication services to end-users. A leader in fixed, mobile and converged
broadband networking, IP and optics technologies, applications and services,
Alcatel-Lucent leverages the unrivalled technical and scientific expertise of
Bell Labs, one of the largest innovation powerhouses in the communications
industry. With operations in more than 130 countries and the most experienced
global services organization in the industry, Alcatel-Lucent is a local
partner with a global reach. Alcatel-Lucent achieved revenues of Euro 15.2
billion in 2009 and is incorporated in France, with executive offices located
in Paris. For more information, visit Alcatel-Lucent on the Internet:
www.alcatel-lucent.com, read the latest posts on the Alcatel-Lucent
blog www.alcatel-lucent.com/blog and follow us on Twitter:
twitter.com/Alcatel_Lucent.

Microsoft and Mediaroom are trademarks of the Microsoft group of
companies.

Alcatel-Lucent Press Contacts: Peter Benedict, Tel: +33(0)1-40-76-50-84, peter.benedict at alcatel-lucent.com; Leonard Pesheck, Tel: +1-630-713-6437, pesheck at alcatel-Lucent.com; Alcatel-Lucent Investor Relations: Frank Maccary, Tel: +33(0)1-40-76-12-11, frank.maccary at alcatel-lucent.com; Don Sweeney, Tel: +1-908-582-6153, dsweeney at alcatel-lucent.com; Tom Bevilacqua, Tel: +1-908-582-7998, bevilacqua at alcatel-lucent.com; Tony Lucido, Tel: + 1-908-582-5722, alucido at alcatel-lucent.com