| JULY 14-16, 2014

SBC taps Alcatel as primary supplier for Project Lightspeed in $1.7 billion deal

October 21, 2004 San Antonio, TX, and Paris -- SBC Communications Inc. has announced a five-year, approximately $1.7 billion primary supplier agreement with Alcatel to provide network equipment and video system integration services for Project Lightspeed, the SBC initiative to drive fiber deeper into its networks to provide customers new, feature-rich Internet Protocol (IP)-based services, including IP television, voice over IP (VoIP), and ultra-fast Internet access.

"This is the next big step forward in our industry-leading deployment of networks that will provide consumers with innovative advanced services," contends Edward E. Whitacre Jr., chairman and CEO of SBC. "We're moving at light speed to bring IP-enhanced services to customers."

The SBC selection of Alcatel is the first in a series of vendor selections to build out SBC's new IP service offerings for customers. To drive fiber deeper into the SBC network, Alcatel will provide SBC with its remote 7330 IP DSLAM solution, which is capable of supporting wire speed triple play services and multiple variations of DSL for SBC's Fiber to the Neighborhood architecture. In addition, Alcatel provides its 7340 Fiber to the Premise (FTTP) solutions.

New feature-rich IP services require a new generation of data networking capabilities. SBC has selected Alcatel's 7750 Service Router and 7450 Ethernet Services Switc,h which will enable the carrier to offer differentiated IP-based services--such as video--that require the high levels of reliability and predictability, while producing Ethernet economies of scale and efficiencies.

SBC has also selected Alcatel as the network and video services integration partner for the entire project. Alcatel will take responsibility for the end-to-end integration of the network and for the end-to-end video integration.

Last week, SBC announced it would dramatically accelerate its $4 billion to $6 billion Project Lightspeed plan to extend its new fiber-optic network closer to customers, with a goal of providing 18 million households IP-based services, including super high-speed data, video, and voice services, in two to three years--rather than five years as previously announced. SBC made the announcement immediately after the FCC issued rules clarifying that it intends to keep advanced networks and services free from regulations designed for traditional telecom services and networks.

According to SBC, Project Lightspeed minimizes deployment time and cost by using both a Fiber to the Premise (FTTP) and Fiber to the Neighborhood solution. This approach gives SBC's customers the IP capabilities they want--integrated digital TV, super-high-speed broadband and voice over IP services--at one-fourth the cost and time as an FTTP-only overbuild.

"Our IP network will strengthen our relationship with our customers by enabling us to differentiate our offerings through service integration and advanced functionality," explains Whitacre. "Project Lightspeed allows us to deliver operating efficiencies with an improved customer experience."

As previously announced, SBC companies are currently trialing FTTP in a number of locations and will launch trials of FTTN early in 2005, which will provide SBC valuable information around consumer views of the technology and how to best design and deliver solutions to meet customer expectations.

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