Alcatel-Lucent 3Q07 NGN and IPTV Update

• Legacy switch revenues continued to decline. NGN revenues not large enough to plug that hole

• Acquired Tamblin, developer of interactive TV programming and advertising for IPTV

• NGN wins during the quarter: Hits Telecom Uganda for a Mobile NGN solution; Mongolia’s Mobicom for a nation-wide NGN network, including softswitches and gateways; and Polish operator Exatel SA for an IMS platform.

• IPTV wins during the quarter: SingTel and Shanghai Telecom

• Enterprise solutions: IP usage penetration rates increased, reaching 43% year to date, versus 36% for the same period in 2006.