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INDUSTRY OVERVIEW OF CEE EU MEMBERS

European enlargement and ICTs. IDATE Foundation’s Seminar. November 24, 2004.

Stan SzuderLucent Technologies CEE

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Lucent Fast FactsLucent Fast Facts

Chairman and CEO: Patricia Russo

Headquarters: Murray Hill, N.J. USA

32,300 employees (6/30/04)

Key operating units: – Integrated Network Solutions (INS)– Mobility Solutions– Lucent Worldwide Services (LWS)

World-renowned Bell Labs has more than 9,500 scientists and engineers engaged in research and development in 10 countries around the world, including the United States

4.304 billion Lucent shares outstanding (6/30/04)

New York Stock Exchange ticker symbol: LU

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Lucent in EMEA

Europe, Middle EastAnd Africa

5,000* employees46 locations in 20 countries7 Bell Labs locations2 manufacturing locations70 Market Advantage Business Partners2 Customer Briefing Centers

COUNTRIES WE’RE ACTIVE IN: Germany - R&D Centres

Italy - IN Competence CentreSpain - R&D Competence CentreRussia - R&D Centre, Repair CentreUnited Kingdom - Wireless Comp.CentreNetherlands - 3R&D CentresSaudi ArabiaFrance - R&DCentres(ON,UMTS,SW)BelgiumPortugalIreland - R&D Centre

Poland - R&D, System Integration Centre Czech Republic - office Slovakia

Hungary Romania Bulgaria Lithuania Latvia Estonia Slovenia Croatia Serbia Ukraine

KazakhstanSwitzerland

Turkey others

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Lucent in CEE – basic information In most countries Lucent built activities since 1990 AT&T/Lucent made major investment in several CEE countries Full range of Lucent products and services portfolio is implemented in

CEE countries The biggest deployment covers Switching (5EES), CDMA, DWDM,

SDH, Network Management Solutions, BBA (Stinger, AnyMedia) Lucent is very active in implementation of new technologies and

services (IMS, UMTS, EV-DO, Applications, Professional Services, Managed Services, etc...)

In several CEE countries Lucent is the main supplier of specific technology domain like: DWDM, Broadband Access, Switching, Network Management Solutions

In most cases Lucent is selling end-to-end solutions TL 9000/ISO 14001/ITCS/UL Compliant and Certified

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Source: EITO 2004

Bulgaria

Czech

Estonia

Hungary

Latvia

Lithuania

Poland

Romania

Slovakia

Slovenia

CEE ICT Spending

5%17%

2%

15%

2%3%38%

9%5% 4%

2003: Euro 40.023 B (graph)

2004: Euro 38.612 B

ICT Spending (M Euro)

02000400060008000

10000120001400016000

Bulgar

ia

Czech

Eston

ia

Hunga

ry

Latv

ia

Lithu

ania

Poland

Roman

ia

Slovak

ia

Sloven

ia

CT IT

CEE ICT InvestmentCEE ICT Investment

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CCEEEE Overview Overview – countries supported – countries supported

Countries with direct support

Countries with indirect support

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The Competitive LandscapeOwnership of OperatorsThe Competitive LandscapeOwnership of OperatorsThe Competitive LandscapeOwnership of OperatorsThe Competitive LandscapeOwnership of Operators

100%

TELE2(SE)

100%

TELE2(LV)

TELE2(EE)

FRANCETELECOM

(FR)

47%

TPSA(PL)

PTKCENTERTEL

(PL)66%

34%

ORANGE(RO)

ORANGE(SK)

68%

64%

TELENOR(NO)

PANNONGSM(HU)

MOBILKOMAUSTRIA

(AT)

VIPNET(HR)

80%100%

RADIOLINJA(EE)

ELISACOMMUNICATIONS

(FI)

75%

SI.MOBIL(SLO)

100%

STRATEGICINVESTOR

FIXED-LINEINCUMBENT

MOBILEOPERATOR

KEY

TELIASONERA(SE/FI)

LATTELEKOM

(LV)

LIETUVOSTELEKOMAS

(LT)

EESTITELEFON

(EE)

49%

60%

49%

EMT(EE)

49%

23%

49%

LMT(LV)

WHOLESALE OPERATIONS IN PL, HU, BALTICS

20%

POLKOMTEL(PL)

VODAFONE(UK)

TDC(DK)

20%VODAFONEHUNGARY

84%

BITE GSM(LT)

100%

20%

MOBIFON(RO)

VODAFONEALBANIA

83%

VODAFONEGREECE

65%

DEUTSCHE TELEKOM

(DE)

MATAV(HU)

HRAVTSKITELEKOM

(HR)

SLOVAKTELEKOM

(SK)51%

51%59%

HTMOBILE(HR)

51%

T-MOBILE(CZ)

67%

WESTEL(HU)

100%

51%

EUROTELBRATISLAVA

(SK)

PTC(PL)

MAKTEL(MK)

43%

WHOLESALE OPERATIONS IN PL, HU, CZ. PRAGONET (CZ)

100%

MOBIMAK(MK)

TELEKOMSRBIJA

(SERBIA)

OTE(GR)

35%

ROMTELECOM(RO)

GLOBUL(BU)

100%

100% COSMOROM(RO)

COSMOTE(GR)

AMC(ALBANIA)

100%

84%

20%

TELEKOMSRBIJA

(SERBIA)

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Key Operators and Partners in CEEKey Operators and Partners in CEE

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Partners : 11 (+1)

– Microlink Latvia (Baltics)

– Fima Lithuania

– Complus Czech Rep

– Vegacom Czech Republic

– BGS Slovakia

– Kapsch Czech Rep/ Hungary

– Sprint Poland

– Veracomp Poland

– UCS Romania

– Smartcom Bulgaria

– Iskra Slovenia ( Balkans)

– Networkstar Croatia

Software Partners: Probell, Schoeller,Sprint,Sun

CEE BUSINESS PARTNERS

Countries : 15 ( +3 regions)

Offices : Warsaw & Prague

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Lucent CEELucent CEE Full Set of ActivitiesFull Set of Activities

MAIN ACTIVITIES

Factory, Order Desk

HR, LRE, IT, CFO

Project Managementt

Sales and Contract

management

Services

Marketing and

presales

Purchasing

R&D and Technical Support

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Lucent competence areas located in CEELucent competence areas located in CEE

Over 500 employees, with offices in Poland and Czech Republic, and project offices as needed, cooperation with local subcontractors

Factory in Bydgoszcz providing switching, access and CDMA 450 systems for the European market and beyond

R&D organization in Bydgoszcz provides software solutions for 5ESS® switching system and AnyPath® messaging platform for countries around the world

Lucent Worldwide Services organization providing end-to-end service portfolio (Technical Support Services, Network Deployment Services, Professional Services, Managed Services)

Bydgoszcz provides engineering services for the whole EMEA region

Training centre in Bydgoszcz provides technical training courses for the region and beyond

Poland is responsible for processing orders for all EMEA customers

CEE Lucent has the highest Customer Loyalty Index in Europe

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Lucent R&D in Poland - BydgoszczLucent R&D in Poland - BydgoszczSoftware development for Lucent customers worldwide

– 170 software and telecom professionals, added 50 staff in 2004

– End-to-end project responsibility including project managment, requirements, development, testing and field support

– Devolopment support 24x7

Product Portfolio– 5ESS™ Switch

– AnyPath™ Unfied Messaging System

– Software Technology Center

Others– More than 50 software engineers outsourced

– Strong and long term relationship with Universities

– Global certificat TL 9000

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BYDGOSZCZ

KWIDZYŃTCZEW

KLADNORAJECKO

TATABANYA

TIMISOARA

Lucent TechnologiesLucent TechnologiesManufacturing Partners Located in CEEManufacturing Partners Located in CEE

Lucent Technologies Poland Sp. z o.o.

– Jabil – Kwidzyn Poland, Hungary

PCB Assembly & Manufacturing; System Assembly, Technology Serv.

– Celestica Rajecko and Kladno in Czech Republic,

PCB Assembly; final assembly, test, configuration, repair&distribution

– Solectron – Timisoara, Romania, PCB Assy (high volume / low mix)

– Flextronics – Tczew, Poland & Sarvar Hungary – cables, FAT, cell phones

– Sanmina - Tatabanya, Hungary

graphic cards, mother boards, ADSL modems, base station cards

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METALS

PLASTICS

CABLES

COMPONENTS

ASSEMBLY

BODY SHOP

BODY SHOP

PACKAGING WAREHOUSING

INTEGRATION

CP’s EXPORT/IMPORT/ECCN

Bydgoszcz – PolandBydgoszcz – PolandSupply & Service Campus – Outsourcing ModelSupply & Service Campus – Outsourcing Model

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Opportunities for Telcos and VendorsOpportunities for Telcos and Vendors

Telcos– Clear opportunities in the provision of international services either

through direct presence or a partnership strategy

– There are a number of potential targets for strategic investment with alternative fixed-line operators focussing on the corporate sector being the most attractive

Vendors– Infrastructure investment by telcos is beginning to pick up after the

slump

– Mobile operators will continue to invest heavily in IT as they roll-out new messaging and data services and further improve custom service

– Large-scale investments in mobile infrastructure are unlikely in the near term

– Fixed-line infrastructure investment is being directed towards broadband access and IN solutions

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Thank you. Thank you. Questions?Questions?

http://www.lucent.com