This project comprises:

- The reinforcement of R&D teams by 100 employees in Europe - 60 of which will join the R&D teams at three French sites : Brest, Colombes and Illkirch.
- The creation of a software maintenance center at Alcatel sites in India.

During the past few years, the PABX switching market has been strongly impacted by the arrival of IP technology and applications activities, in which Alcatel is a leader. Alcatel has, therefore, decided to reinforce its R&D teams in order to maintain its cutting edge in IP activities. The R&D redeployment program aims to further generate solutions to drive activities while, at the same time, allowing the close management of R&D expenditures.

The project will consist of two main elements:

- The creation of a software maintenance center at Alcatel sites in India before the end of 2005. The objective of this new R&D team, which will comprise 115 people, will be to assure software development and maintenance.

- The full-time assignment of engineers working on development projects in France. These teams, who today assure equipment development and maintenance will be able to fully concentrate on strategic development activities and new product launches, the strategy being to further reinforce the relationship between R&D and marketing teams.

This project reinforces the international dimension of Alcatel's enterprise solutions activities and will enable the Group to maintain its cutting edge in IP technology and applications.

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