Alcatel-Lucent Leads in Femto/small Cells, Securing Twelve New Contracts in Three Months

4G WORLD CHICAGO and PARIS, October 19, 2010 - Alcatel-Lucent (Euronext Paris and NYSE:
ALU) today announced that the company has secured its 12th Femto contract in
only three months — another proof point of Alcatel-Lucent's progress and
strength in the worldwide small cells market. Alcatel-Lucent is clearly
establishing itself as the leading end-to-end Femto/small cells vendor,
currently holding more than 20 on-going trials (with Etisalat (
www.alcatel-lucent.com/wps/portal/newsreleases/detail?LMSG_CABINET=Docs_and_Resource_Ctr&LMSG_CONTENT_FILE=News_Releases_2010/News_Article_002226.xml&lu_lang_code=en)
in the United Arab Emirates, for instance) and 14
commercial deployment agreements. Commercial contracts include the selection
of Alcatel-Lucent by Vodafone Group as its preferred vendor for the
deployment of a nationwide Femtocell service in the UK, implementation of
which has already started.

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Alcatel-Lucent's Small Cell solution features numerous Bell Labs
innovations around self-organizing networks (SON)
which significantly reduce operational expenses while improving network
performance. Not only does SON empower Alcatel-Lucent's Small Cell portfolio
to automatically configure at power up, it also enables the small cells to
periodically monitor, update and optimize their neighbor relation lists and
handover parameters - thus reducing handover failures by up to 80%. Using SON
technology, Alcatel-Lucent's Small Cell portfolio also has the capability to
continuously adjust transmit power to the surrounding environment - to
deliver the best possible coverage.

According to a recent study by market research firm Infonetics
Research, "4G Strategies: Global Service Provider Survey," there is
significant operator interest in launching Femtocell services. This is
particularly true of 3G Femtocell-based cellular home zones, with 36% of
respondents currently offering such a service and 82% planning to do so by
2014.

"Having been an early proponent of this technology, introducing its
first Femtocell solution more than five years ago, Alcatel-Lucent is well
positioned to help mobile operators take advantage of this burgeoning
opportunity," says Richard Webb, Directing Analyst for WiMAX, Microwave &
Mobile Devices, Infonetics Research.

"Alcatel-Lucent Bell Labs' modeling has shown that it is
up to 100 times less expensive to send a bit through a small
cell than it is through the macro cell. Small cells provide quicker and more
economical capacity gains and should become an essential ingredient when
augmenting mobile broadband capacity and moving to smarter networks," adds
Wim Sweldens, head of Alcatel-Lucent's Wireless activities. "The small cell
market is gaining real traction and is now set for the next phase, with
commercial services and large-scale deployments expected to significantly
increase by the end of 2010. Alcatel-Lucent is a front runner in this space
as illustrated by our recent wins - i.e., one per week."

About the Alcatel-Lucent Small Cell approach

The Alcatel-Lucent Small Cell portfolio currently consists
of the 9361 Home Cell and the 9362 Enterprise Cell. Alcatel-Lucent's
Small Cell approach benefits from the company's unique
expertise in bringing together wireless and IP technologies into a single,
coherent network. It is an integral part of Alcatel-Lucent's Application
Enablement vision - building on its High Leverage Network(TM) architecture to
deliver wireless IP services.

More information:
www.alcatel-lucent.com/wireless/femto_small_cells.html

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 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's
blog www.alcatel-lucent.com/blog and follow us on Twitter:
twitter.com/Alcatel_Lucent.

Alcatel-Lucent Press Contacts, Peter Benedict, Tel: +33(0)1-40-76-50-84, peter.benedict at alcatel-lucent.com, Wim Van Daele, Tel: +32-3-240-46-01, wim.van_daele at alcatel-lucent.com, Christine de Monfreid, Tel: +33(0)1-30-77-59-14, Christine.de_monfreid 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