PARIS, France, May 11 /PRNewswire-FirstCall/ -- Alcatel (Paris: CGEP.PA and NYSE: ALA) and Sistema (SSA.LI), the largest private sector consumer services company in Russia and the CIS, and an active player in the Russian telecommunications market, today announced completion of a project to deploy a platform for the delivery of advanced multimedia services to Sistema's residential customers.

Under the terms of the contract signed in September 2004, Alcatel delivered to Sistema Multi Media (Sistema's media arm) a fully integrated end-to-end video solution for the delivery of rich media in a triple play service mix (voice, data, and video). Additionally, Alcatel provided integration, customization and installation services.

Starting this month, Sistema's unique service (called "Stream TV") is enabling Sistema Multi Media subscribers to watch more than 80 local and international channels with digital quality, including the company's own channels ("Drive", "Health", "Hunting and Fishing") as well as two football channels (Chelsea and Manchester United). Additionally, the "Virtual Cinema" and video on demand options deliver a wide selection of the latest local and international movies.

The Alcatel solution enables Sistema, a new-generation service provider, to fully profit from the investment in their broadband access network and to open new opportunities for business in the broadband entertainment market. Alcatel's flexible architecture, which is based on open industry standards, enables fast implementation of advanced broadband entertainment services, thus increasing network efficiency and overall profitability.

"We consider our project as a core of a future Intellectual House," said Alexander Leiviman, General Director of Sistema Mass Media. "Our subscribers will be able to connect any home devices to a single access point and have access to practically unlimited video, music and Internet resources with outstanding quality. The high quality of Alcatel's solutions enables us to offer highly profitable new generation multimedia services".

"Sistema is truly a forward thinking operator, and this project is quite unique in the broader East European telecommunications market," said Jacques Dunogue, Executive Vice President and President of Europe and South for Alcatel. "I am convinced that this project opens a new phase in the introduction of broadband technologies and multimedia services in the Russian telecommunications market."

About Sistema

Sistema is the largest private sector consumer services company in Russia and the CIS, with over 35 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, insurance, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 4.1 billion for the first nine months of 2004 and total assets of US$ 7.7 billion as at September 30, 2004. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), and under the symbol "CUCT" on the Moscow Stock Exchange (MSE). Sistema Mass Media is a holding company that operates Sistema's media businesses. Additional information is available at http://www.sistema.ru/

About Alcatel

Alcatel provides communications solutions to telecommunications carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or to their employees. Alcatel leverages its leading position in fixed and mobile broadband networks, applications and services to bring value to its customers in the framework of a broadband world. With sales of EURO 12.3 billion in 2004, Alcatel operates in more than 130 countries. For more information, visit Alcatel on the Internet: http://www.alcatel.com/

CONTACT: Sistema JSFC Contacts: Andrey Ryabinnikov/Head of Press
Service, Tel: +7-(095)-730-1705, ryabinnikov@sistema.ru,
Sistema JSFC Investor Relations: Andrey Bliznyuk/Head of IR
Department, Tel : +7-(095)-730-1543, bliznyuk@sistema.ru,
Alcatel Press Contacts: Aurelie Boutin/HQ, Tel:
+33-(0)1-40-76-11-79, aurelie.boutin@alcatel.com, Mark
Burnworth/HQ, Tel: +33-(0)1-40-76-50-84,
mark.burnworth@alcatel.com, Alcatel Investor Relations: Pascal
Bantegnie, Tel: +33-(0)1-40-76-52-20,
pascal.bantegnie@alcatel.com, Nicolas Leyssieux, Tel:
+33-(0)1-40-76-37-32, nicolas.leyssieux@alcatel.com, Maria
Alcon, Tel: +33-(0)1-40-76-15-17, maria.alcon@alcatel.com,
Charlotte Laurent-Ottomane, Tel: +1-703-668-3571,
charlotte.laurent-ottomane@alcatel.com