Alcatel-Lucent Annual Review 2011 - LGS Innovations · (long term evolution) wireless service in the Middle east, bringing subscribers true broadband services to ... annual revieW

“We don’t wait toadapt to the future,

our job is todefine it.”

JEONG KIMPrEsIdENt, BEll laBs

“The good news is that Alcatel-Lucent has set very big goals, and I think that

they are appropriateand ambitious goals.”

ErIC OlsONsENIOr vICE PrEsIdENt, BusINEss

fOr sOCIal rEsPONsIBIlIty

BEING GrEENCompanies have to think farther into the future than ever before, anticipating the impact of actions today on tomorrow’s generations.

read more about being green

aNNualrEvIEw2011

annual revieW 2011

Table of ConTenTs

CHaIrMaN’s MEssaGE

2011 IN rEvIEw

alcatel-lucent WorldWide

Strategy

Featured ProductS and SolutionS

Strategic technologieS

Market PoSitionS

fINaNCIal PErfOrMaNCE

MeSSage FroM the chieF Financial oFFicer

key FigureS

OPEratIONal rEvIEw

IMPaCt ON tHE wOrld

corPorate reSPonSibility

StakeholderS

ethicS and coMPliance

being green

our PeoPle

Social iMPact

SuPPly chain

BEll laBs rEPOrt

reSearch highlightS

diScovery StorieS

in MeMory - denniS ritchie

vOICE Of tHE NEtwOrK

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annual revieW 2011alCatEl-luCENt

CHaIrMaN’sMEssaGE

2011in review

financialperformance

operationalreview

impact onthe world

bell labsreport

voice of thenetwork

“In 2011 it became even clearer to me that while practically we provide our customers with networks and related equipment, in fact we are giving them the power to connect people.”

PHIlIPPE CaMusCHaIrMaN

MoMenTUM GaTHeReD

alcatel-lucent entered 2011 propelled by a tailwind of market success. While the year brought its challenges, not the least of which was economic uncertainty in europe, the company continued to win customer confidence, strengthen its position in north and latin america and expand its footprint in china and throughout asia-Pacific.

our portfolio supports the ongoing transition from voice communication to video. our solutions give network operators the tools they need to answer growing demand with profitable capacity. the transformed alcatel-lucent of today is an indispensable partner to the global telecommunications industry — and a vocal advocate for the power of telecoms to drive sustainable economic growth and social development.

CHaIRMan’s MessaGePHIlIPPe CaMUs

Our customers operate the world’s communication

networks. Their customers — billions of people

across all six continents — use those networks to

connect, collaborate and thrive. Our three-year

transformation journey has equipped us to meet

our customers’ needs, and their customers’

expectations of living connected lives.

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CHaIrMaN’sMEssaGE

2011in review


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beInG an InnoVaTIon CoMPanYthree years ago, we set a plan to strengthen our structure,

streamline our processes and unite our people behind a

convincing, compelling vision and strategy. by 2010 we

were engaged in implementation; 2011 was all about

building momentum, with a focus on further increasing our

profitability.

over the year, we reorganized our operating segments to

better support our vision of the network as a revenue-

generating platform delivering higher quality service to

end users. our High leverage Network™ approach — grown

out of our understanding that networks can no longer

afford to be passive conduits of information but rather

must respond to new opportunities with agility — continued

to resonate with customers. in iP and optics, respectively

the near and far of networking, we strengthened our share

of the market. disruptive technologies such as lightradio™

garnered industry attention.

this constant focus on innovation runs throughout the

entire organization, right up to the level of the board. in

2009, we established a technology committee to foster

that understanding and inform our strategic direction. this

committee, which brings together directors and company

innovation leaders (including the President of bell labs,

Jeong kim), has been a tremendous success.

the other prerequisite for innovation is people — creative

minds with deep knowledge. the company continued to

attract leading professionals and develop its vast pool

of talent in 2011 including, importantly, young people

such as our new executive vP, human resources and

transformation, 37-year-old christel heydemann.

cultivating the next generation of leaders is important

to our company over the long term, and to society in

general. i remained personally involved last year in many

initiatives to improve ties between businesses, research

centers and universities.

THe PoWeR of ConneCTIonin 2011, it became even clearer to me that while

practically we provide our customers with networks and

related equipment, in fact we are giving them the power

to connect people. in some regions, that power is literally

world-changing. in all regions it is vitally important to the

future — and our responsibility is to deliver.

the board of directors and executive management

of alcatel-lucent worked closely and collaboratively

throughout 2011 — critical as we faced emerging

challenges such as the european debt crisis. obviously,

i am disappointed that our profits were not where they

needed to be for us to issue a dividend. but i am pleased

with the progress we made toward profitability in 2011.

While we cannot control external circumstances, we can

further control our cost structure.

going forward in 2012, we will be working on increasing

the diversity of our board to benefit from the richness

of multiple perspectives. We will continue to insist that

the company continues to lay emphasis on innovation

and disruptive projects, control its costs and increase its

profitability. and we will begin to implement the next leg

of our journey as a global leader in telecoms.

By PHIlIPPE CaMus

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alcatel-lucent worldwide strategy featured products and solutions strategic technologies market positions

alCaTel-lUCenT WoRlDWIDeInnoVaTIon Has no boUnDaRIes

Our driving motivation at Alcatel-Lucent is to

realize the potential of the connected world —

by providing the technologies needed to turn

networks into engines of sustainable economic

growth, social development and opportunity.

eVeRY DaY, aRoUnD THe WoRlD driven by breakthrough thinking and a wide-open sense of what’s possible, alcatel-lucent delivers the world’s most advanced technologies to companies all across the globe.

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noRTH aMeRICa THe aPP leaDeRMassive sMartPHONE uptake generating demand for all kinds of apps

tHE ClOudnetwork companies devising innovative BusINEss MOdEls to capitalize on ClOud opportunities

tHE ltE lEadErMore ltE deployed here than anywhere else in the world

Cala MassIVe MobIlITYSecond-largest mobile subscriber base in the world @ 643 MIllION people – with accelerated mobile uptake and low demand for fixed network services

sMart stuffhigh sMartPHONE adOPtION driven by availability of low-cost devices

eMea sTRenGTH In nUMbeRscarriers in eMea are cooperating —focusing on INtErNatIONal expansion, infrastructure and procurement — to improve cost and operational efficiency.

all aBOut tHE EXPErIENCECustOMEr EXPErIENCE aNd BraNd arE the main business drivers for companies in the region.

NatIONal INfrastruCturEattracting investment from mission-critical stratEGIC INdustrIEs — an excellent opportunity for growth

aPaC RaCInG aHeaDWorld leaders in mobile and fiber

with rapid EXPaNsION of 3g mobile

broadband driving IP aNd OPtICs — even

with ltE sPECtruM allocated slowly

CItIEs arE tHE Catalyst

urBaNIZatION driving market

growth in aPac

Global ReaCH

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EXECUTIVE BRIEFING CENTERS

CANADA

IRELAND

U.K.

BELGIUM

FRANCE

GERMANY

THE NETHERLANDS

ITALY

SPAIN

RUSSIA

ROMANIA

POLAND

SLOVAKIA

U.S.

BRAZIL

ISRAEL

TURKEY SOUTH KOREA

CHINA

INDIA TAIWAN

AUSTRALIARESEARCH CENTERS

PRODUCT AND SOLUTIONDEVELOPMENT CENTERS

Global ReaCH

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$600 MIllIonthe value of social and economic

benefits ePb chattanooga’s smart grid will deliver over the next 10 years – built with alcatel-lucent technology.

seVenthe number of nobel prizes shared

by 13 bell labs scientists.

$100 bIllIonthe price tag of commuter gridlock

every year in the u.S. — which alcatel-lucent is helping unlock through its intelligent travel time System (ittS).

725,000 PassenGeRs

the number of people transported every day on the Paris Metro line 1,

now “driverless” thanks to alcatel-lucent ground-to-train

data transfer solutions.

25 MInUTesthe time it takes for trains to pass

under the english channel. thanks to alcatel-lucent smart systems for rail, passengers will soon be able to stay

connected that whole time.

75%that’s how much one network company

reduced the number of first 30-day calls it received from customers thanks

to alcatel-lucent Motive customer experience Management solutions.

29,000 +the number of active patents held by alcatel-lucent – more than 2,600 of

which were obtained in 2011.

1 oUT of eVeRY 3in fact, more than one of every three broadband dSl lines worldwide uses alcatel-lucent technology, allowing people to access high-speed voice,

video and data services.

200the number of alcatel-lucent

collaborations with university and research-partner globally.

KeY faCTs

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1.8 TeRabITs PeR seConD

that’s how fast the recently launched alcatel-lucent 100g coherent optical

solution can process data — the equivalent of more than 150 full, two-hour movies

being handled every second.

100is how many standards organizations

alcatel-lucent participates in.

eIGHTthat’s how many research centers alcatel-lucent maintains around

the world.

MoRe THan76,000

that’s how many people alcatel-lucent employs – representing more than 100

nationalities; al part of a global company headquartered in Paris, France.

60WaTTs

a 60-watt lightbulb consumes more power than an entire metro cell built on alcatel-lucent’s lightradio™ cube.

21.6 bIllIonthat’s how many mobile apps will be downloaded annually by 2015.

alcatel-lucent has the world’s largest directory of application programming

interfaces: more than 5,500.

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THe WoRK We DoFrom uruguay to Japan, from high-speed fiber optic networks to the carrier cloud, alcatel-lucent’s collaborations with customers, partners and stakeholders consistently break new ground around the globe.

NEXt-GEN wIrElEss COMEs tO latIN aMErICa

americas

in uruguay, people are enjoying the most sophisticated

mobile services in all latin america thanks to communications

provider antel’s rollout of the region’s first commercial

4g ltE wireless network, with technology supplied by

alcatel-lucent. the new network supports hd video,

high-speed internet, video conferencing and a host of

other advanced mobile applications.

lONG tErM EvOlutION: an advanced standard for

high-speed mobile communications.

wHErE NEXt Is NOw

Europe, Middle East and africa

alcatel-lucent was selected by Saudi telecom company

(Stc), the leading service provider in the kingdom of

Saudi arabia, to support the launch of the first 4g lte

(long term evolution) wireless service in the Middle

east, bringing subscribers true broadband services to

their mobile devices. the challenge: to get to market

ahead of the competition without compromising the user

experience. alcatel-lucent plans to achieve both objectives

by providing an lte solution that rolls out ultra-fast

mobile access quickly while enabling a wave of brand new,

powerful applications and improving the quality of video,

multiplayer gaming, in-car connectivity and business-to-

business communication.

HIGH sPEEds tO MEEt HIGH EXPECtatIONs

asia-Pacific

historically quick to adopt new technologies, Japanese

consumers tend to have high expectations when it comes

to accessing the latest solutions and services. these days,

the hot items are video and social networking — driven by

widespread smartphone and tablet use. Wireless city Planning,

a subsidiary of Japanese internet company SoFtbank,

is readying to meet that demand and satisfy consumer

expectations with its aXgP Mobile broadband network.

aXgP is highly compatible with td-lte, and delivers ultra

high-speed performance, enabling a wide array of mobile

applications and content. alcatel-lucent is providing the

iP networking technology to link base stations throughout

the new mobile network and ensure an exceptional quality

experience as usage grows.

CUSTOMER STORY CUSTOMER STORY CUSTOMER STORY

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sTRaTeGYTHe neTWoRK THaT’s MoRe

THan JUsT a neTWoRK

In 2011 Alcatel-Lucent continued to pursue its High

Leverage Network™ strategy, helping customers

around the world transform their networks into

platforms with the flexibility and intelligence to

change not only how we communicate but, more

fundamentally, how we live.

THe HeaRT of an aPP-baseD WoRlD

commerce. education. cooperation. activism. networks are at the center of our lives — catalysts for an explosion of human creativity and potential. in a world of hundreds of thousand of apps and ever smarter and specialized devices, with people and machines continually connected through the cloud, the network is the beating heart of our world.

our job at alcatel-lucent is to continually push the limits

of what networks can enable. that’s the vision behind our

high leverage network™ (hln) strategy: reengineering the

network as an intelligent, flexible, dynamic platform for life

in the 21st century.

a high leverage network is built on the intelligence of iP

(internet Protocol) technology. Service aware and highly

responsive to demand, it is optimized for the cloud and

intelligent about the smallest details of user requirements.

green and efficient, it provides the high-quality experiences

that delight end users and keep them coming back for more.

a fOrCE tO BE rECKONEd wItH

“You know, two, three years ago I remember sitting in boardrooms of service providers who said ‘Alcatel-Lucent? They’re not a wireless player.’ I think that’s fundamentally changed. Is Alcatel-Lucent a wireless player today? Hell, yes.”

CaMIllE MENdlErPrINCIPal aNalystINfOrMa

Play vIdEO

http://bcove.me/2ec7dvkn

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WHaTeVeR We neeD THe neTWoRK To Doour customers are the world’s network companies,

enterprises and governments — entities that operate

networks either for their own purposes or to deliver

services to others. as they increasingly move applications

and content to the cloud, hln is becoming more important:

today, even simple applications are network-dependent.

Music and video no longer reside on devices, but stream

to listeners. enterprise applications are not installed on

desktops but delivered as software as a service (saas).

all from the cloud.

hln has the intelligence built in to manage the flow of

huge volumes of traffic with the right quality of service,

at optimum cost. it is optimized for the demanding scale

of cloud-based services. and with the right analytical tools,

hln provides the information to ensure people have the

best network-based experience possible.

Whether for business or entertainment, online and mobile

learning, banking, smart grids or mobile medicine, the high

leverage network is a platform that connects and captivates

—a tool for delivering a superior experience to whomever is

using it, for whatever reason, wherever they are.

saas: a cloud-hosted model for delivering software

applications to people.”

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oUR sTRaTeGY PRoVes oUT

alcatel-lucent’s committed pursuit of its hln strategy continued to pay off in 2011. by the end of 2011, our hln portfolio accounted for nearly half of our networks segment’s revenues — 48 percent.

customers have been quick to recognize, and leap at,

its promise of profitably delivered revenue-generating

services and applications that capitalize fully on the

capabilities of the network.

hln draws on our leading expertise in access iP, optics,

software, services and the growing field of cloud. that

expertise combined with the innovative outcomes of bell

labs research has produced groundbreaking technologies

to support the hln strategy; see the list below.

hln allows network companies to create smarter, greener

networks. networks that operate more efficiently, that

require less power, that can accommodate alternative

energy sources. networks that deliver the most advanced

services and at the same time bridge the digital divide

between those who have traditionally had access to the

benefits of technology and those who have not.

With hln the network becomes a platform not only for

connecting the world, but also with the power to change it.

lightRadio™

revolutionizes wireless networks and

continues to gain market traction

fP3 anD Psebreaking through the speed barrier to

usher in the next era in network capacity

and integrating iP and optics

Cloudband™

the “carrier cloud,” putting cloud

capabilities at the disposal of network

companies to streamline their operations

and enhance their services

MoTIVea platform and suite of applications that

provides deep insight into the quality of

the user experience — insight available

only to the network operator, and an

invaluable asset

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ONE NEtwOrK. INfINItE POssIBIlItIEs


leading French communications company bouygues

telecom chose alcatel-lucent last year to overhaul

its existing infrastructure into a single, flexible and

powerful iP network capable of delivering video, high-

speed internet and voice services to fixed and mobile

customers alike. the new network improves services

across the full range of devices people use and enhances

the capabilities of bouygues telecom’s bbox residential

gateway, which combines internet access, cable tv and

landline phone functionality.

rEsPONdING tO tHE BaNdwIdtH surGE

asia-Pacific

bharti airtel, a leading global telecommunications company

with operations in 20 countries across asia and africa has

selected alcatel-lucent to create iP access network — based

on carrier ethernet technology (cen) — thereby enabling the

operator to deliver faster mobile broadband speeds to

its customers. this iP network will allow bharti airtel to

meet the surging bandwidth requirements of customers

while accessing data, video and internet services on an

array of devices, such as smartphones, tablets and laptops.

With ever growing data demand for both personal and

enterprise broadband services set to soar further, bharti airtel’s

move to create a cen (carrier-grade ethernet)-based iP access

network will help the company to offer its customers various

services such as video streaming, high speed data, social

network-based applications, online gaming, video conferencing

and online collaboration. additionally, this network would also

be catering to the dSl broadband as well as 2g/3g/4g voice

and data traffic making it a true converged network.

MaKING 4G ltE dEvICE uPdatEs sIMPlE

americas

verizon Wireless is using Mobile device Management

(MdM) software from alcatel-lucent to manage the rapidly

growing number of 4g lte smartphones and tablets on

its 4g lte network. building on verizon’s commitment to

deliver industry-leading customer care, Motive MdM gives

verizon customers the ability to take advantage of automatic

software updates and upgrades.


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feaTUReD PRoDUCTsanD solUTIons10 TeCHnoloGIes

CHanGInG THe WoRlD

In a world where an hour of video is uploaded

to YouTube1 every second, networks need to be

smart, flexible and ready to grow. Every day,

our technologies allow the world’s networks

to carry more information to more people —

faster and more efficiently than ever before.

1. youtube is a trademark of google, inc.

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HOw lIGHt Is yOur MOBIlE NEtwOrK?

technology: lightradio™

More than half the planet’s population is still without access to high-speed mobile communication services.

rEad MOrE aBOut lightradio™

watCH tHE lightradio™ vIdEO

While the importance of connectivity is almost universally

acknowledged, building more networks is expensive,

operating them consumes huge amounts of power, and

cities are running out of affordable real estate for cellular

antennas and towers. launched in 2011, alcatel-lucent

lightradio™ takes on these and other challenges. it’s

invisible (almost), inclusive, powerful and green. at its

heart is the cube — a modular, low-power antenna invented

by bell labs.

the cube weighs less than 300 grams and can be deployed

in a whole variety of configurations to deliver mobile

communications to previously unreached areas. in the

process, it reduces network power consumption by as

much as 51 percent. lightradio™ was recognized as a

game-changing innovation with ngn leadership and ctia

emerging technology awards last year. it also earned

alcatel-lucent a place on the MIt technology review’s

2012 tr50 list of the World’s Most innovative companies.

300 grams: that’s about one and a half cups of chocolate chips.

1

http://www.alcatel-lucent.com/solutions/lightradio

http://bcove.me/6ohnsuoh

http://www3.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4x3tXDUL8h2VAQAURh_Yw!!?LMSG_CABINET=Docs_and_Resource_Ctr&LMSG_CONTENT_FILE=News_Releases_2012/News_Article_002607.xml

http://www3.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4x3tXDUL8h2VAQAURh_Yw!!?LMSG_CABINET=Docs_and_Resource_Ctr&LMSG_CONTENT_FILE=News_Releases_2012/News_Article_002607.xml

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sOME CONNECtIONs COuNt MOrE tHaN OtHErs

technology: lte For Public SaFety

alcatel-lucent is using lte (long term evolution)

technology — a high-speed, standards-based mobile

communication technology — to help public safety agencies

communicate and share visual information live and in the

moment. First responders and their command centers can

send video and still images back and forth to evaluate

emergency situations rapidly and determine the right

response. this helps enhance safety and decision-making,

and allows public safety personnel to communicate and

collaborate securely, and interoperate regardless of

location or device.

WHen IT lITeRallY CoMes DoWn To lIfe oR DeaTH

aMeRICas

In 2011, Charlotte, North Carolina became one of

the first municipalities in the world to announce

plans to deploy a next-generation LTE mobile

network for public safety communications. The new

network, built by Alcatel-Lucent, accelerates and

enhances communication between first responders,

national law enforcement and emergency response

agencies. It supports tools such as mobile video,

field-use fingerprinting and facial recognition

applications and reduces response times through

greater interoperability between emergency service

providers’ systems. All of which adds up to better

chances of saving lives.

2

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“MOst INNOvatIvE EurOPEaN COMMuNICatIONs PrOduCt Of tHE yEar”

technology: opentouch™

Frost & Sullivan awarded alcatel-lucent a 2011 europe

ict award for Most innovative european communications

Product of the year for the company’s opentouch suite

of communications platforms launched earlier last year.

opentouch allows medium and large enterprises to take

full advantage of technologies that make it easy to evolve

from communications that are primarily voice-centric and

one-to-one to multimedia, multi-party communications.

opentouch allows companies to realize a range of benefits

including cost reductions, greater choice of devices for

employees and the ability to use multiple media for

communication.

BEst Of INtErOP 2011

technology: omniSwitch™ 6900

companies depend on data centers to store information,

serve up applications and support their daily business.

last year alcatel-lucent unveiled the omniSwitch 6900, an

energy-efficient, high-speed switch that allows companies

to manage applications in all kinds of data center settings:

multi-site data centers, departmental or workgroup data

centers, and blended environments as well. the flexible,

high-performance omniSwitch 6900 was named “best of

interop” — a global it expo and conference — in 2011.

wHat arE yOu watCHING?

technology: digital Media StoreFront

People today want to view and share video, tv and

multimedia content wherever they happen to be, via

whatever device they happen to have handy — be it a

tv, Pc or smartphone. the challenge for our customers is

to deliver high-quality content fast enough, and with the

added value to make their offering stand out. the alcatel-

lucent digital Media storefront allows them to do just

that. it brings multimedia content closer to customers for

faster downloads at a lower cost, and uses the network’s

knowledge of viewer preferences to define and offer new,

high-value services.

digital Media storefront: For providing online apps,

games, ebooks, music and videos to consumers.

3 4 5

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tHE POwEr Of PrEdICtION

Service: Proactive ServiceS

With early insight into potential trouble brewing in

the network, issues can be addressed before they

become severe enough to affect services and revenue.

collecting network information is the easy part: picking

out the patterns and interpreting what they mean takes

specialized tools and knowledge. alcatel-lucent’s Proactive

Services solution is giving network companies the

right mix of tools and expertise to predict, prevent and

prioritize network issues that otherwise can be invisible,

buried under a sea of data. these solutions also help

companies run leaner, more efficient network operations

teams focused on customer satisfaction.

tHE NEtwOrK MaKEs tHE ClOud

technology: cloudband™

the flexibility and convenience of anywhere, anytime

access to applications and content has driven cloud

computing to the top of many organizations’ technology

agendas. alcatel-lucent launched CloudBand™ in december

2011 — an innovative technology that allows service

providers to deliver high-performance cloud services to

businesses and consumers, and also to reap the benefits

of the cloud in their own operations. by combining the

computing power and flexibility of the cloud with the high-

performance, reliability and security of communications

networks, cloudband™ is the foundation for a new class

of what are being called “carrier cloud” services.

watCH tHE CloudBand™ vIdEO

tHE NEw CONvErsatION EXPErIENCE

technology: 4g conSuMer coMMunicationS

if there’s one word that describes people’s expectation of

today’s communication technologies, it’s choice. not only

choice of devices, but also of how to hold a conversation.

the alcatel-lucent 4g consumer communications solution

allows network companies to offer that choice to their

customers. With a tap of the finger, people can switch

between voice, video, messaging and group calling and

shift calls from one device to another. Picked up a call

on your deskphone but have to leave for a meeting?

no need to hang up and phone back on your mobile;

4g consumer communications lets you switch in the

moment. in the middle of playing Xbox2 with your kids

and need to answer the phone? done with a click.

rEad MOrE

6 7 8

2. Xbox is a trademark of Microsoft corp.

http://www.alcatel-lucent.com/solutions/cloud

http://bcove.me/umczkpll

http://www.alcatel-lucent.com/solutions/4g-consumer-communications

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yOu CaN dEPENd ON It

technology: SMart gridS

Many electric utilities have moved their communications

to iP/MPlS wide-area networks over the past several

years, taking advantage of smart, reliable digital features

and functionality. With the support of alcatel-lucent,

altalink is the world’s first utility to support all of its

mission-critical communications with iP/MPlS, including

the teleprotection systems that activate equipment to

protect the power system when faults occur. by doing so,

altalink and alcatel-lucent have proved that iP/MPlS

technology delivers the speed, reliability and performance

needed for the most vital communications. utilities in the

united States and europe are now following altalink’s

lead, laying the foundation for smart grid applications

that help manage energy use more effectively.

MOrE CaPaCIty fOr MOBIlE NEtwOrKs

technology: Mobile backhaul

ever wondered how you can have five bars of coverage

and still not be able to download the latest news? at six

billion cellular subscriptions3 and counting, the world’s

mobile networks are facing a capacity crunch. they need

more bandwidth — but it has to come at a low, controllable

cost and still deliver all the reliability and quality people

expect. alcatel-lucent has drawn on its expertise in fixed

and mobile network transformation to develop a mobile

backhaul (high-speed bulk transmission) solution that

supports any generation of mobile communication — 2g,

3g, 4g/lte and beyond — and delivers a wide range of

new services including voice over iP, video and messaging.

the cost savings compared to traditional mobile networks?

up to 50 percent.

9 10

3. http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats

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voice of thenetwork


sTRaTeGIC TeCHnoloGIes

Alcatel-Lucent continued in 2011 to develop game-

changing innovations — technologies that bring the future

closer and reframe the possibilities for today’s networks.

fastEr, tIMEs fOur

technology: FP3 400g netWork ProceSSor

Most networks today deliver content at speeds of 10,

40 or increasingly, 100 gigabits per second. in 2011,

alcatel-lucent introduced the world’s first 400 gigabit per

second (400g) network processor. the alcatel-lucent FP3

can quadruple the speed of the most advanced networks

available, making it possible for network companies to

explore a whole new generation of online applications,

entertainment and communication services. not only is the

FP3 faster than any other network processor on the market

today, it also cuts power consumption by up to 50 percent.

every component of the FP3 chip was designed in-house

by alcatel-lucent, drawing on the research of bell labs.

rEad MOrE

http://www3.alcatel-lucent.com/products/fp3/

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2011IN rEvIEw


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


rEaCHING fartHEr, fastEr

technology: 100g coherent oPticS

optical networks are the superhighways of communication

today, carrying information over long distances through

fiber cables at the speed of light. in 2011, alcatel-lucent

launched the world’s first commercial, single-carrier

coherent solution to increase the capacity of optical

networks to 100 gigabits per second. (‘Single-carrier

coherent’ refers to the way the optical signal is handled

within the network.) the new 100g optical solution is

based on several years of field testing and deployment,

and gives network companies the ability to introduce

new, high-bandwidth services for customers at the

lowest cost per bit of information transported. like

lightradio™ and the 400g FP3 chipset, the 100g optical

solution has industry-leading energy efficiency built in,

to minimize power consumption. our drive to innovate

hasn’t stopped there. building on the 100G coherent

optical solution, alcatel-lucent launched the world’s first

commercial 400g photonic service engine in 2012.

rEad MOrE

CanaDa Goes 100G aMeRICas

Shaw Communications launched the next generation of Canada’s fastest Internet service with the

country’s first 100 gigabit per second (100G) fiber optic network in 2011. Delivered by Alcatel-Lucent,

the network has the capability to carry up to 88 100G channels over a single pair of fibers.

100G

Alcatel-Lucent launched the world’s first

commercial, single-carrier coherent solution

to increase the capacity of optical networks

to 100 gigabits per second.

http://www3.alcatel-lucent.com/100g-coherent/



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2011IN rEvIEw


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impact onthe world

bell labsreport

voice of thenetwork


NO GHOst stOry: PHaNtOM MOdE Is rEal aNd rEvOlutIONary

technology: PhantoM Mode vdSl2

dSl stands for digital Subscriber line, and is the technology

used to deliver broadband internet and related services

over telephone wiring. the average dSl connection offers

download speeds of about 4 megabits per second, and the

average vdSl2 (very high speed digital subscriber line)

provides about 20 megabits per second. through techniques

such as bonding and vectoring, vdSl2 can boost bit rates to

100 megabits per second or more. at least, that used to be

the ceiling. in 2011 alcatel-lucent announced that, thanks

to a bell labs first, it had achieved download speeds of 300

megabits per second over two dSl lines with a technology

called ‘Phantom Mode’. Starting with two physical twisted-

pair wires, Phantom Mode creates a third virtual pair on top

of the other two, using vectoring to cancel out interference

between the lines. this increase in bandwidth enables more

video-on-demand, hdtv and other high-bandwidth services

— all without having to dig up your lawn.

rEad MOrE

HoW fasT Is YoUR CoUnTRY? eURoPe, MIDDle easT anD afRICa

If you’re Belgium, the answer is “very.” Belgacom, Belgium’s largest telecommunications company, called on Alcatel-

Lucent to help it launch the world’s first commercial VDSL2 vectoring solution, which will extend high-speed network

services to more than a million customers throughout the country. By 2014, Belgian citizens will enjoy network speeds

of 50 megabits per second and beyond. With 81 percent of Belgium covered by VDSL2, a figure that will climb to

85 percent by the end of 2013, the country is one of the world’s leading broadband nations.

So why does speed matter? Because with faster networks comes the possibility of more applications — solutions

that drive economic growth and social well-being such as eHealth, eLearning and more.

http://www.alcatel-lucent.com/products/phantom-mode

http://www.alcatel-lucent.com/products/phantom-mode

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chairman’smessage

2011IN rEvIEw


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impact onthe world

bell labsreport

voice of thenetwork


POwErful, aNd POwEr-lEss

technology: active antenna array

understanding that radio frequency

(rF) equipment is pretty much the

biggest power consumer in a cell tower,

responsible for up to 75 percent of energy

use in traditional mobile base stations,

bell labs scientists looked for ways of

minimizing the need for rF components.

their solution: active antenna arrays,

which integrate functions such as signal

processing and signal generation directly

into the antenna at the top of the tower,

along with the receiver. all of this

eliminates the need for power-hungry rF

feeder cables and significantly reduces

power losses in the rF equipment itself. by

switching off array segments when cellular

usage is low, the solution allows for even

more energy savings.

rEad MOrE

sMart, sINGlE aNd lOOKING tO HaNdlE sOME HEavy traffIC

technology: Service router oPerating SySteM (SroS)

People usually think of network

equipment as hardware, but the software

that goes into it is every bit as important

in determining its performance. the

alcatel-lucent Service router operating

System (SroS) is a rich, resilient and

reliable operating system designed for

the entire alcatel-lucent Service router

portfolio. application-aware and fault-

tolerant, it provides a single, scalable

oS across all platforms, bringing down

the total cost of network ownership.

With SroS, network companies can be

assured of consistency no matter what

their network includes: ethernet, older

technologies such as atM and tdM, or

mobile services and applications.

lOOK, Ma, NO HaNds

technology: Zero-touch PhotonicS

For companies running optical networks,

the challenge today is twofold: they

have to find cost-effective ways to add

capacity to keep up with demand; and

they need better tools for managing

their networks, remotely, with flexibility,

minimizing onsite intervention. alcatel-

lucent Zero-touch Photonics (ZtP)

removes almost all need for manual

intervention in optical networks. it

increases not only capacity but also the

operator’s ability to respond to customer

demand with accelerated turn-up and

service times. through these efficiencies,

total operating cost is reduced. a unique

element in the company’s ZtP offering

is the patented Wavelength tracker

technology, which monitors the health

and status of individual wavelengths

traveling across a network.

PlayING By a dIffErENt sEt Of rulEs

technology: agile ruleS technology

as more and more calls are made over

the world’s mobile networks, handling

those calls becomes increasingly difficult.

Systems typically follow sets of rules

about how to treat different kinds of calls

(“traffic”), but the more traffic there is,

the slower the system can be to process it

all — disrupting service or degrading the

quality of audio and video. alcatel-lucent

turned all of that on its head in 2011 with

the introduction of agile rules technology

(a.r.t.). rather than process every incoming

message, a.r.t. filters them and picks out

the ones to which a rule applies: only those

are processed by the network’s policy

engine. a.r.t. improves the performance

and reduces the load on the policy engine,

keeping the network flowing optimally.

http://www3.alcatel-lucent.com/eco/innovation-engagement/pet.html

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chairman’smessage

2011IN rEvIEw


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


MaRKeT PosITIonsoUR PlaCe In THe MaRKeT

Today’s telecoms environment is one of radical

adaptation: network companies are continually

evolving to keep up with their customers’

expectations. With one of the broadest portfolios of

products and services available today, Alcatel-Lucent

reorganized into three operating segments last year to

better support its vision of the network as a platform

that allows companies to better monetize their

networks and improve quality of service.

< t >26


chairman’smessage

2011IN rEvIEw


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


neTWoRKs

IP

Number 1 in mobile backhaul

with 25% market share in the first

half of 2011

Number 2 in IP/MPls service

provider edge routers

23% market share in 2011

OPtICs

Number 1 in submarine

optical networking

with estimated 35-40% market

share (revenues) 2011

Number 2 in terrestrial

optical networking

with 16% market share based on

revenues in 2011

Number 2 in wdM long haul

with 17% market share based

on revenues in 2011

wIrElEss

Number 1 in CdMa

with 37% market share

(u.S. and china) in 2011

Number 2 in ltE

with 24% market share in 2011

wIrElINE

Number 1 in broadband access

with 37% dSl market share based

on revenues in 2011

Number 1 in vdsl2

with 44% market share revenues

in 2011

Number 2 in GPON

based on revenue with

24% market share in 2011

networks, which includes four main businesses — iP, optics, Wireless and Wireline — provides end-to-end networks and individual network elements that meet the

strategic communications needs of fixed, mobile and converged service providers. the networks group also includes another smaller business, radio Frequency Systems.

< t >27


chairman’smessage

2011IN rEvIEw


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


NEtwOrK aPPlICatIONs

Customer experience solutions

for more than 150 of the world’s

leading service providers

98 IMs customer projects

including for 8 of the top 10 global

operators based on 2011 rankings

200+ subscriber data Management

deployments with more than one

billion subscribers

190+ payment customers

including 8 of the top 10 global

mobile operators based on 2011

rankings

deployment of Motive Customer

Experience Management solution

by nearly 200 customers around

the world

sErvICEs

Industry leader in

IP transformation

with 2000+ professional services

projects globally

13 worldwide regional

Competence Centers

and 4 regional delivery centers

providing 24x7 support across

all continents

Managed services worldwide

presence in more than 130

countries – with 100+ operator

networks covering 250 million

subscribers

Number 2 in Oss/Bss integration

over the rolling four quarters

ending Q3’11

Number 3 in overall

services market

over the rolling four quarters

ending Q3’11

stratEGIC INdustrIEs ENErGy

80+ mission-critical networks

and smart grids transformation

in the world

traNsPOrtatION

80+ mission-critical rail networks

in the world

PuBlIC safEty

30+ mission-critical public

safety solutions

in the world

sofTWaRe, seRVICes & solUTIons (s3)

Software, Services & Solutions (S3) delivers a portfolio of combined software, services and solutions. its Services division designs, integrates and manages networks. its network applications division integrates services and

software to better monetize networks and quality of service. this group also supports end-to-end solutions for strategic industries (energy, transportation and the public sector).

< t >28


chairman’smessage

2011IN rEvIEw


operationalreview

impact onthe world

bell labsreport

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ENtErPrIsE

Number 2 in Europe,

Middle East and africa (EMEa)

in enterprise telephony in 2011

2011 leader

in unified communications &

collaboration Magic Quadrant

2011 leader

in corporate telephony

Magic Quadrant

enTeRPRIse

enterprise, which provides voice telephony, data networking technology and call center software (Genesys). on February 1, 2012, we consummated the sale of our genesys business to Permira.

http://www3.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4w3sTAASYGYRq6m-pEoYgbxjggRX4_83FT9IH1v_QD9gtzQiHJHR0UAOMxDgw!!/delta/base64xml/L3dJdyEvd0ZNQUFzQUMvNElVRS82X0FfNDgx

< t >29


chairman’smessage

2011IN rEvIEw


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


CONNECtING MIllIONs

asia-Pacific

in 2011, alcatel-lucent and china’s three major operators

— china Mobile, china telecom and china unicom — signed

agreements to bring superfast broadband services to

millions throughout the country. alcatel-lucent’s fiber-

based solutions have been contracted for and deployed

in 25 provinces for china Mobile, 29 provinces for

china telecom, and 30 provinces for china unicom. the

latter will constitute one of the world’s largest fiber

broadband access networks. these projects are major

milestones in the rapid modernization of china’s

telecommunication landscape and demonstrate alcatel-

lucent’s strong and growing leadership in china’s fiber

broadband market.

BlaZING sPEEds uNdEr a BlaZING suN


alcatel-lucent and telefónica Spain joined together in

2011 to deliver superfast 4g mobile broadband services

using lte technology. Pre-commercial pilot networks in

Madrid and barcelona gave telefónica the chance to test

different applications and services in preparation for a

full-scale launch, while close collaboration in a co-creation

program with alcatel-lucent helped accelerate time to

market. With the business and technical case established,

telefónica demonstrated its ability to rapidly build a

mobile high-speed lightradio™ network powered by

alcatel-lucent lightradio™ — opening the way for a

whole new suite of high-speed services to be delivered

to consumers and businesses.

tO BOldly GO

asia-Pacific

the Wheatstone Project in Western australia is an

enormous undertaking: the construction of a $29-billion

liquefied natural gas processing plant in a remote area

of the country. in collaboration with global engineering

company bechtel, alcatel-lucent is contributing a

complete communications and security system for

the facility. this includes an iP-based phone system,

a broadcast system for fast emergency notifications,

satellite communications, structured cabling, video

conferencing, radio systems, communications towers and

an uninterruptible power backup system. it’s the largest

project of its type undertaken by alcatel-lucent.


< t >30


chairman’smessage

2011in review

fINaNCIalPErfOrMaNCE

operationalreview

impact onthe world

bell labsreport

voice of thenetwork

message from the chief financial officer key figures

MessaGe fRoM THe CHIef fInanCIal offICeR

DelIVeRInG InnoVaTIon

With a strong product roadmap, an integrated vision

and a demonstrated commitment to streamlining

and focusing its operations, Alcatel-Lucent’s

business continued to strengthen in 2011 — meeting

the needs of customers around the world.

a GrEat OPPOrtuNIty

“Given the explosion of data traffic and in particular video traffic, and the pressure that puts on operators’ networks around the world...it’s a great opportunity for our customers to differentiate their offerings. We help them do that.”

Paul tufaNOCHIEf fINaNCIal OffICEr

sTRaTeGY PaYInG off

We improved our financial performance in 2011, doubling our operating profit over the previous year and posting for the first time since the merger a positive net profit.

in a way, the story of 2011 was a tale with two halves.

We had a very strong start to the first part of the year —

tempered, in the end, by europe’s sovereign debt crisis,

which put a pause on spending in the region and softened

what has traditionally been a pattern of solid fourth

quarters for us. although visibility remains limited, our aim

for 2012 is to achieve an adjusted operating margin higher

than the level reached in 2011, and reach a strong positive

net cash position at the end of 2012.

Play vIdEO

http://bcove.me/xve75yyb

< t >31


chairman’smessage

2011in review


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


in 2011, our portfolio continued to meet the strategic needs

of our customers; our reduced expenses and streamlined

operations made us more nimble and responsive.

over the past three years, we have made solid progress

against our product strategy, providing not only the

hardware but also the software and services to meet

worldwide demand for rich multimedia services. our

roadmap is clear and well integrated. looking ahead,

i believe the relevance of our offerings will only

continue to increase.

last year reinforced for me that alcatel-lucent is a unique

company: a truly global technology leader with operations

in 130 countries; an execution-based enterprise powered

by creative, intelligent, skilled and energetic people. i look

forward to seeing the returns those characteristics yield

in 2012 — and for the opportunity to meet our customers’

requirements.

By Paul tufaNO

< t >32


chairman’smessage

2011in review


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


KeY fIGURes

Since undertaking an ambitious transformation plan in 2008,

Alcatel-Lucent has achieved gains in three key areas of financial

performance: cost savings, operational profit and cash flow.

2011 KEy fIGurEs

€15.3

billion annual revenues

€610million adjusted*

operating income, twice

the level of 2010

€1.095billion published net

profit, first positive net

profit since the merger

€2.4billion adjusted* r&d

expenses, 15% of our

revenues

€979million operating

cash flow**

€(31)million net

(debt)/cash

* excludes the main impacts from lucent’s purchase price allocation and reports genesys as continued operations. ** “operating cash flow” is defined as cash flow after changes in working capital and before interest/tax paid, restructuring cash outlay and pension and oPeb cash outlay.

< t >33


chairman’smessage

2011in review


operationalreview

impact onthe world

bell labsreport

voice of thenetwork


rEvENuEs By rEGION 2011alcatel-lucent, which is present in more than 130 countries, serves customers

around the world.

rEvENuEs By sEGMENt 2011a leader in mobile, fixed, internet Protocol (iP) and optical technologies and applications,

alcatel-lucent helps connect people to an ever-expanding world of digital services.

North America - 38%

Networks - 62%

Software, Services and Solutions - 28%

Enterprise - 8%

Other - 2%

Europe - 30%

Asia-Paci�c - 17%

Rest of the world - 15%

REVENUES BY REGION 2011

FINANCIAL PERFORMANCE

REVENUES BY SEGMENT 2011

Alcatel-Lucent, which is present in more than 130

countries, serves customers around the world.

A leader in mobile, �xed, Internet Protocol (IP) and

optical technologies and applications, Alcatel-Lucent

helps connect people to an ever-expanding world of

digital services.

North America - 38%

Networks - 62%


Enterprise - 8%

Other - 2%

Europe - 30%

Asia-Paci�c - 17%










digital services.

North America - 38%

Networks - 62%


Enterprise - 8%

Other - 2%

Europe - 30%

Asia-Paci�c - 17%










digital services.

North America - 38%

Networks - 62%


Enterprise - 8%

Other - 2%

Europe - 30%

Asia-Paci�c - 17%










digital services.NOrtH aMErICa – 38%

Smartphones and video

drive acceleration of

iP/lte transformation

NEtwOrKs – 62%

growth driven by strong

increase in iP (9.9% year

over year at constant

currency); Wireless up 4.6%

s3G – 28%

Services flat

and network

applications

down 3.6%

ENtErPrIsE – 8%

increase of 2.4%

year over year

OtHEr – 2%rEst Of wOrld – 15%

latin america

double digit growth

driven by expansion

of fixed and wireless

broadband networks

middle east /africa

decline due to

political unrest

aPaC – 17%

china

Strong opportunities

in Wireless and Pon

rest of apac

expansion of fixed and

wireless broadband

networksEurOPE – 30%

caPeX prioritization,

capacity expansion

fInanCIal PeRfoRManCe

< t >34


chairman’smessage

2011in review


operationalreview

impact onthe world

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voice of thenetwork


fIXEd COst savINGs adJustEd OPEratING PrOfIt frEE CasH flOw

2009 2010

~ €1BN CUMULATIVE

€(56)M

€610M

2X

2011

2009

(696)

(1,167)

(818)

(175)

(458)

(691)

2010 2011

2009

2010 2011

FREE CASH FLOW IN €M

EXCLUDING WORKING CAPITAL IN €M

2009 2010

~ €1BN CUMULATIVE

€(56)M

€610M

2X

2011

2009

(696)

(1,167)

(818)

(175)

(458)

(691)

2010 2011

2009

2010 2011



2009 2010

~ €1BN CUMULATIVE

€(56)M

€610M

2X

2011

2009

(696)

(1,167)

(818)

(175)

(458)

(691)

2010 2011

2009

2010 2011



THRee YeaRs of TRansfoRMaTIon

< t >35


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2011in review


operationalreview

impact onthe world

bell labsreport

voice of thenetwork

Q1 ’09

32%

39%

37%

33%

39%40%

37%

41%

43%

35%

46%

48%

Q1 ’10 Q1 ’11 Q2 ’09 Q2 ’10 Q2 ’11 Q3 ’09 Q3 ’10 Q3 ’11 Q4 ’09

Q4 ’11 SALES: €1,193M-11% YOY2

M€

140050%

45%

40%

35%

30%

1200

1000

800

600

Q4 ’10 Q4 ’11

IN M EUROS (2009) IN M EUROS (2010) IN M EUROS (2011) IN % OF NETWORK SALES


1. Products supporting our hln strategy: iP, dWdM, Wt-MPr, oMSn-tSS, W-cdMa, lte, Small cells, iPdSlaM, xPon olt/ont, iMS core 2. at constant currency

Q4 2011 HIGH leVeRaGe neTWoRK™ (Hln)¹

< t >36


chairman’smessage

2011in review


OPEratIONalrEvIEw

impact onthe world

bell labsreport

voice of thenetwork

oPeRaTIonal ReVIeWWHaT IT Means To be a

TeleCoMs leaDeR ToDaY

Providing the technologies and services customers

need to transform their networks and deal

with massive demand for video, Alcatel-Lucent

continues to assert its role as a global leader

in telecommunications.

tHE traJECtOry Of PrOGrEss

“Speed to market and a robust innovation pipeline are the most important ingredients. Once you’re on the trajectory of progress, you increase your speed going forward.”

BEN vErwaayENCHIEf EXECutIvE OffICEr

oUR MoMenTUM CoMes fRoM InnoVaTIon

it has been three years since we set ourselves out on a path of transformation. We did so because we recognized our customers — the operators of the world’s communication networks — were encountering massive changes in their markets, in technology, in the very fundamentals of their business models.

it was, and remains, our responsibility to help address

those changes, to give our customers the tools to deliver

the high-speed communication services the entire globe

today depends on.

our research and development is now focused on providing

customers everything they need to build what we call high

leverage networks™ — networks that respond to opportunity,

keep up with the mounting demand associated with high-

bandwidth services like video, and generate bottom-line value.

by the end of 2011, almost half of all our networks sales

were related to high leverage networks (hlns).

Play vIdEO

http://bcove.me/q7mwcjzr

< t >37


chairman’smessage

2011in review


OPEratIONalrEvIEw

impact onthe world

bell labsreport

voice of thenetwork

We apply the hln strategy in ways that suit each

market’s unique needs. last year, next-generation 4g

wireless and the compelling services it enables were the

order of the day in the u.S. in india, network operators

responded to shifting regulatory conditions and massive

uptake of mobile communications; in china, the rollout of

high-speed network infrastructure topped the agenda.

europe’s economic travails made operational excellence

a top priority, with customers seeking to drive out cost

and complexity. in africa and the Middle east,

communication technology continued to be recognized

as key to social and economic advancement. around

the world the dynamics are different but the underlying

needs — what networks have to do — remain

fundamentally the same.

over the past three years, alcatel-lucent has solidified as

a company. our customers have endorsed our strategy,

our employees are engaged and passionate. Financially, we

doubled our profit between 2010 and 2011. in 2012, our aim

is to strengthen our cash position.

our conviction is that we will gain further momentum

through innovation: our ability to turn ideas into products

and services as rapidly as possible and get them to market.

We have made great progress, and i am confident we will

continue to do so in the years to come.

By BEN vErwaayEN

< t >38


chairman’smessage

2011in review


operationalreview

IMPaCt ONtHE wOrld

bell labsreport

voice of thenetwork

corporate responsibility stakeholders ethics and compliance being green our people social impact supply chain

CoRPoRaTe ResPonsIbIlITYlIVInG oUR ValUes

People have high expectations of corporations

today. And they should. Business doesn’t happen in a

vacuum. It happens in communities. It touches lives.

It has an impact on the environment, economies and

societies — and implications for the future.

It’s HOw wE wOrK

“Corporate responsibility: is that part of a program, or is it part of your DNA? For us it is absolutely part of our DNA... we want it in every aspect of our way of working. It is a part of the success formula of our organization.”

BEN vErwaayENCHIEf EXECutIvE OffICEr

MaKInG CoMMITMenTs THaT MaTTeR

at alcatel-lucent, we measure our performance not only in terms of what we do but also how we do it. We see corporate responsibility (cr) as a business imperative. last year, we gave particular focus to cr activities in three areas: environmental sustainability; supporting and developing our people; and working to make sure that everyone, everywhere has access to the digital technologies that are changing our world.

alCatEl-luCENt’s 2011 Cr COMMItMENts aNd aCHIEvEMENts

alCatEl-luCENt’s COrPOratE rEsPONsIBIlIty rEPOrt 2011

Play vIdEO

http://www3.alcatel-lucent.com/sustainability/

http://www3.alcatel-lucent.com/sustainability/reports/Alcatel-Lucent-CR-Report-2011-EN.pdf

http://bcove.me/xdz0qvq3

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GrEEN

lead the industry in developing and deploying globally recognized innovation in eco-sustainable communications technologies

that enable our customers to compete and win in a world

facing increasing environmental challenges and resource

constraints. We seek, with the greentouch™ consortium

initiated by bell labs, to make communications networks

1,000 times more energy efficient than they are today.

you can get involved too. Find out how.

email us at [email protected]

Our PEOPlE

invest in our people and talents while reflecting the diversity of the markets we serve and the communities in which we operate

We will ensure our employees work in a stimulating

environment of continuous learning while fostering diversity

and open dialog via innovative tools to share knowledge

and celebrate difference. the alcatel-lucent university

provided 1.3 million hours of training to our employees

in 2011. our award-winning Engage internal social

networking platform is enabling employees throughout

the company to share, collaborate and exchange best

practices on each other’s expertise and talents.

Some 26,000 employees use engage at least once a month.

dIGItal INClusION

realize the potential of a connected world and digital inclusion by developing and deploying affordable, sustainable communication solutions

that will increase access to education and socio-

economic development to the world’s citizens in a

sustainable manner. We will address digital inclusion

through our innovative products and solutions, through

our high leverage network™ platform as well as our

applications offering, enabling global connectivity. this

will change the way billions of people live and work,

improve the quality of life around the globe and connect

the world’s talent to new opportunities.

oUR PRIoRITIes

mailto:[email protected]

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oUR ValUes1. wE taKE a ZErO-tOlEraNCE staNCE

on compliance violations and reinforce full integrity

in every business action from every employee, as well

as treating each other with respect and empathy.

MOrE aBOut COrPOratE rEsPONsIBIlIty

2. wE COllaBOratE aNd dO BusINEss

only with partners, including suppliers, contractors

and subcontractors, who share and support our values.

We commit to regularly and thoroughly assess their

cr performance and partner to ensure improvement.

3. wE COMMIt tO ENGaGING

as a company and as individuals, with pride and passion

as citizens of the communities where we are present

across the globe.

alWaYs sTRIVe To Do beTTeR

We monitor sustainability issues and trends to direct our cr efforts and continually strengthen our approach.

in 2011 we assessed a wide range of issues relevant to our industry — everything from

customer expectations, risk management, the environment (operation and products),

employees, ethics and governance, products, services, our supply chain, community

and philanthropy. We developed our priorities out of that assessment, along with cr

commitments in areas core to our business. and as we’ve taken action against those goals,

we’ve reached out to employees, partners and stakeholders for their insights into how we

as a company can address global environmental, social and technological challenges.

BECausE EXPECtatIONs arE HIGH

ErIC OlsONsENIOr vICE PrEsIdENtadvIsOry sErvICEs, Bsr

Play vIdEO


http://bcove.me/2keavwsp

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oUR CoRPoRaTe ResPonsIbIlITY ReCoGnIZeD

as part of its commitment to corporate responsibility, alcatel-lucent

participates in and adheres to a number of relevant international

frameworks including the dow Jones Sustainability index (dJSi),

the united nations global compact (ungc), the global reporting

initiative (gri) and the carbon disclosure Project (cdP). the company

has also implemented France’s grenelle ii environmental legislation

— ahead of its official compliance date. For our performance related

to these frameworks, and for many other initiatives undertaken by

our company as a whole and by individual employees, we received

awards and distinctions last year.

RaIsInG THe baR

We prepared this year’s CR report edition according to Global Reporting Initiative

(GRI) guidelines and submitted it to the GRI organization for its assessment. We

earned a GRI Application Level Check Statement A+, the highest evaluation rank.

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lEadING Our sECtOr

alcatel-lucent was the dJSi’s top-ranking

communications technology (cMt) company in 2011,

capping a list of 14 organizations assessed by the dJSi’s

rating agency, Sustainable asset Management (SaM).

the dJSi gives asset managers objective measures for

evaluating companies and managing sustainability-

related investment portfolios. inclusion in the dJSi

is an indicator of good financial and environmental

performance, corporate governance, supply chain

management and community involvement.

rEad MOrE aBOut tHE dJsI

MaKING tHE BOOK

the SaM Sustainability Yearbook lists the top 15 percent

of the world’s 2,500 largest companies in terms of cr

performance. alcatel-lucent was named to the 2012

edition with three distinctions: gold class, Sector leader

and Sector Mover. these recognize the progress we’ve

made to implement a thorough sustainability approach

aligned with our business priorities.

rEad MOrE aBOut tHE saM SuStainability yearbook

GradE “a” CarBON rEPOrtING

alcatel-lucent once again made the cdP carbon

Performance leadership index in 2011, placing in the

highest level “a” band and improving the company’s

score by 10 percent over the previous year. the carbon

Performance leadership index rates companies for their

voluntary disclosure of carbon emissions. More than

3,000 organizations participate, including many

of europe’s largest corporations.

rEad MOrE aBOut tHE CarBON dIsClOsurE PrOJECt

http://www.sustainability-indices.com/

http://www.robecosam.com/images/sam-yearbook-2012-final.pdf

https://www.cdproject.net/en-US/Pages/HomePage.aspx

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sTaKeHolDeRsWoRKInG WITH sTaKeHolDeRs

Realizing the potential of a connected world can’t be

done alone. That’s why we engage with stakeholders

who share our vision — and are eager to collaborate

in active, innovative ways to achieve it.

ENErGy + INsIGHt = CHaNGING tHE wOrld

“One of the important contributions Alcatel-Lucent has made has been its leadership — in product innovation, but also from the Chief Executive Officer down in terms of personally demonstrating a commitment.”

rOBErt GrEENHIllMaNaGING dIrECtOr aNd CHIEf BusINEss OffICErwOrld ECONOMIC fOruM

WHaT’s a ‘sTaKeHolDeR’, anYWaY?

our stakeholders are anyone our business touches: customers, investors, industry peers, governments, ngos, our colleagues. in 2011, we connected with these groups to take on three challenges: climate change, the shift to digital economies, and making sure rural communities are included in the digital revolution. our tools? direct discussions, joint initiatives, global forums, blogs, twitter,1 youtube2 and our award-winning internal social media platform, engage.

1. twitter is a trademark of twitter, inc. in the united States and other countries. 2. youtube is a trademark of google, inc.

ALCATEL-LUCENT

Local Authorities

Governments/Regulators

Analysts / Media

Customers Employees

Unions NGOs

Stakeholders/Investors

Suppliers/ Subcontractors

Civil Society

Play vIdEO

http://bcove.me/krp379w5

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COMMIttEd tO tHE 10 PrINCIPlEs

alcatel-lucent has been a longtime signatory to the

united nations global compact (ungc). We’re committed

to integrating its 10 principles on labor standards, the

environment and anti-corruption into everything we do and

— by participating in ungc regional partnership networks —

to gaining a better understanding of our stakeholders’

needs and the environments in which we operate.

IMPrOvING tHE statE Of tHE wOrld

through our Strategic Partnership with the World economic

Forum (WeF), we play our part in “improving the state of the

world” by focusing on issues such as inclusion, innovation and

diversity. We’re involved in various key WeF communities:

the Science advisory council, technology Pioneers, young

global leaders, Women leaders and gender Parity, green

growth board, Partnering against corruption, the ict global

agenda council and the Foundation board.

Our PuBlIC affaIrs

our Public affairs team works with governments and

regulators to develop digital networks that can deliver

e-health, e-learning and other services supportive

of economic development and public welfare. We

also promote public policies that extend broadband

connectivity to underserved and rural populations — a

cause we continue to champion to bodies such as the un,

itu, uneSco and the World bank.

dOuBlE-strENGtH INNOvatION

alcatel-lucent is a founding member of the global

e-Sustainability initiative (geSi), which brings together

organizations committed to developing technologies

and practices that foster economic, environmental and

social sustainability. at the end of 2011, the bell labs

greentouch initiative and geSi announced a partnership

to help mitigate climate change by driving research and

investment into energy-efficient ict solutions.

asKING HOw wE dId

our customer Satisfaction Survey Program gives us

the chance to find out how well we’re meeting our

customers’ expectations — and gives us the information

to continuously improve our relationships. in 2011, our

customer survey participation rate rose to 53 percent

and we received more than 3,000 responses to our

business partner survey.

rEad MOrE aBOut Our Cr rEPOrt

PUTTInG PRInCIPles InTo PRaCTICe


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IMPRoVInG THe sTaTe of THe WoRlD

ben verwaayen, alcatel-lucent chief executive officer; Foundation board Member during the session TIME Davos Debate on Capitalism at the annual Meeting 2012 of the World economic

Forum at the congress center in davos, Switzerland, January 25, 2012.

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aPrIl 2011

celebrated earth Week by sharing

with employees videos, blogs and

tweets on our eco-sustainability

strategies.

May 2011

chief executive officer ben

verwaayen co-chaired the

eg8 forum in Paris, discussing

the impact of the internet on

society and the economy.

May 2011

adolfo hernandez, President Software,

Services & Solutions and Strategic

industries, participated in the WeF africa

Summit in cape town, where he spoke

about the importance of infrastructure

for growth in the african region.

May 2011

communicated our corporate

responsibility commitments

in a face-to-face forum with

ecid, our european-based

employee union.

MarCH 2011

Met with greenpeace to

discuss global climate change,

and invited greenpeace to

geSi to promote open dialog

on climate change within the

ict industry.

JuNE 2011

Presented our sustainability

priorities to employees via

the engage social media

platform, prompting more

than 4,000 performance

improvement suggestions.

JuNE 2011

Presented our corporate

responsibility priorities

to investors through a

series of one-on-one

dialogs.

July 2011

chief executive officer ben

verwaayen joined 37 chief

executives to offer european

digital agenda commissioner an

11-point outline of principles on

how to meet superfast broadband

network rollout targets.

a YeaR of enGaGeMenTHIGHlIGHts frOM 2011

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OCtOBEr 2011

chief executive officer ben verwaayen

participated in the un broadband

commission meeting in geneva, where

commissioners developed targets

challenging governments worldwide to

achieve the Millennium development goals.

OCtOBEr 2011

co-hosted a conference in ghana

with social entrepreneur and tech

Pioneer bright Simons on creating

new employment opportunities

leveraging mobile learning

(mlearning).

OCtOBEr 2011

hosted a ungc meeting in

antwerp to present our

activities in favor of

eco-sustainability and

digital inclusion.

OCtOBEr 2011

rajeev Singh-Molares, President aPac

and chairman WeF ict global agenda

council, chaired a WeF global agenda

council on ict meeting in abu dhabi

to set an action plan and promote the

importance of mlearning for all.

NOvEMBEr 2011

hosted a two-day virtual boot

camp for employees — which

included participation from

five global sites via youtube —

on social innovation.

NOvEMBEr 2011

chief executive officer ben verwaayen

co-chaired the WeF india Sustainability

Summit and india economic Summit in

Mumbai, actively participating in sessions

focusing on climate change and youth.

dECEMBEr 2011

Stephen carter, eMea President and

chief Marketing & communication

officer, met with WeF young global

leaders in the united kingdom to

discuss global growth through the

digital economy.

sEPtEMBEr 2011

Jeong kim, President bell labs and

chief Strategy officer of alcatel-lucent,

met with young technology Pioneers

and young global Scientists at the WeF

Summer davos to discuss innovation,

science and ‘smart growth’.

a YeaR of enGaGeMenTHIGHlIGHts frOM 2011

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eTHICs & CoMPlIanCeInTeGRITY Is IMPeRaTIVe

We accept nothing less than 100 percent integrity

in all our business practices. Every employee is

required to comply with all applicable legal and

company requirements, and our Zero Tolerance Policy

addresses identified violations in keeping with our

established resolution processes.

rEady aNd vIGIlaNt

“The company has in place the policies and processes that are generally expected for fighting corruption and that is very good news.”

laurENt COHEN-taNuGIfrENCH aNtI-COrruPtION COMPlIaNCE MONItOr

Play vIdEO

http://bcove.me/467b5yr7

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a CoMPanY-WIDe CoMMITMenT

We’ve taken steps throughout our organization to ensure we uphold our ethical commitments, including establishing:

a strONG “tONE at tHE tOP”our CEO, Management Committee and business leaders embody our corporate

culture and reinforce our Ethics and Compliance Management System

a KEy rOlE fOr PEOPlE MaNaGErs in setting the bar for business integrity within their teams

sENIOr lEadErsHIP rEsPONsIBIlIty for business integrity

GrOwING rEGIONal lEadErsHIP and oversight of ethics and compliance across the business

COMPrEHENsIvE COMPlIaNCE MEasurEs aNd rElatEd INtErNal CONtrOls

to help avoid and reduce compliance risks

the status of our ethics and compliance program is reviewed regularly at the highest

levels of the company, including by the alcatel-lucent ethics and compliance council

and company board of directors.

MOrE ON Our aPPrOaCH

MOrE ON Our COMMItMENts

http://www3.alcatel-lucent.com/sustainability/policies.html


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as a company, alcatel-lucent succeeds

because of the merits of its products,

services and people. We never pay, offer

or promise to provide anything of value to

obtain or retain business or to secure any

improper advantage, and we never allow a

representative or business partner to make

illegal payments or promises on our behalf.

our anti-corruption compliance program is focused on

making sure our people are aware of and abide by our

policies and all applicable laws, such as the united States

Foreign corrupt Practices act (FcPa) and the united

kingdom bribery act.

in 2011, we analyzed every part of our business for

corruption risk, with each compliance risk assessment

reviewed, approved and documented by the appropriate

Management committee member. We regularly share

consolidated risk assessment results with interested

stakeholders including senior management.

to ensure full alignment, each operating unit’s compliance

risk assessment report was reviewed, approved and

documented by the Management committee member

responsible for that organization. consolidated risk

assessment results are shared regularly with all interested

stakeholders, including senior management.

other key anti-corruption activities in 2011 included:

• ongoing monitoring of legislative and regulatory activities

• annual program self-assessment and development of

related enhancement plans

• annual compliance risk assessment with related

mitigation plans

• regular status reporting to senior management

• continued implementation of eZ visit, a tool to ensure

that gifts, travel and hospitality events are granted in

accordance with anti-corruption policies

oUR HIGHesT PRIoRITY: anTI-CoRRUPTIon

PRaCTICal ReInfoRCeMenT: anTI-CoRRUPTIon TRaInInG

In 2011, we concluded the delivery of an

updated anti-corruption training program to

more than 29,000 staff around the world with

a 97% completion rate. The remaining three

percent of staff will be addressed separately.

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alcatel-lucent is committed to respecting

individual privacy rights and protecting

personal data against unauthorized access,

use, retention/storage or disclosure. in

2011, we revised and enhanced our internal

global privacy and data protection policy,

grounding it in the following principles:

transparency, choice and consent, data

Subject access, Proportionality, disclosure,

data Protection, data Quality, Management

and accountability, and Monitoring and

enforcement.

rEad MOrE aBOut Our GlOBal PrIvaCy aNd data PrOtECtION POlICy statEMENt

PRoTeCTInG PeoPle’s PRIVaCY

RIGHTS OFINDIVIDUALS

TRANSPARENCY

CONSENT

INFORMATIONLIFE CYCLE

INFORMATIONCONTROLS

MANAGEMENT

Management andaccountabilityMonitoring andenforcement

Proportionality

Disclosure

Data protection

Data quality

DATA SUBJECTACCESS

http://www3.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4w3CXMFSYGYRq6m-pEoYgbxjgiRIH1vfV-P_NxU_QD9gtzQiHJHR0UAN0ZNRg!!/delta/base64xml/L0lKWWttUSEhL3dITUFDc0FJVUFOby80SUVhREFBIS9lbg!!

http://www3.alcatel-lucent.com/wps/portal/!ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLd4w3CXMFSYGYRq6m-pEoYgbxjgiRIH1vfV-P_NxU_QD9gtzQiHJHR0UAN0ZNRg!!/delta/base64xml/L0lKWWttUSEhL3dITUFDc0FJVUFOby80SUVhREFBIS9lbg!!

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designed to promote compliance and

ethical behavior consistent with the highest

standards of our customers, shareholders

and employees, our ethics and compliance

Management System provides a clear,

inclusive compliance governance structure,

monitoring and auditing practices, multiple

means of reporting on our performance, and

continuous education and training.

the system helps all employees throughout the

organization live up to their responsibilities to uphold

our code of conduct.

confidentiality is key to the success of the system.

employees and contractors need to feel free to raise

questions and concerns without fear of reprisal or

retaliation. our compliance issues reporting Methods

initiative provides a variety of channels for reporting

possible ethical breaches, and alcatel-lucent has a “no

retaliation” policy that specifically prohibits adverse action

against individuals who in good faith report suspected

violations of law or company policy.

HoW We lIVe UP To oUR ResPonsIbIlITIes: eTHICs anD CoMPlIanCe ManaGeMenT sYsTeM

“ethical behavior wasincorporated into our 2011

employee performance management process, with briefing documents and Q&as for employees

and people managers outlining expectations and what ethical

behavior means to our business.”

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beInG GReenCoMMUnICaTIons foR a sUsTaInable PlaneT

Companies have to think farther into the future

than ever before, anticipating the impact of actions

today on tomorrow’s generations. This is especially

true when it comes to the environment, where

consequences can sometimes take decades

to unfold — and longer to undo.

beInG GReen

telecommunications technologies have the potential to make our world greener and more sustainable. as an innovation company, alcatel-lucent has built its business on thinking ahead. We’ve turned that future-facing mindset to the challenge of “eco-sustainability”, looking at ways to enhance our environmental performance and give other sectors the tools they need to improve their own.

read more about our green commitments and

achievements:

lEarN MOrE aBOut Our aPPrOaCH tO ECO-sustaINaBIlIty

IN Our Cr rEPOrt

http://www3.alcatel-lucent.com/sustainability/environment.html

http://www3.alcatel-lucent.com/sustainability/environment.html


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DEVELOPINGECO-SUSTAINABLE NETWORKSWe bring innovative products,services and solutions to market with the goal ofcreating networks thatare eco-sustainablefrom end to end.

REDUCING OUR CARBON FOOTPRINTWe’ve committed to shrinking ourown absolute carbon footprint to50 percent of its 2008 level by 2020.By the end of 2011, we were 22 percentof the way toward that goal.

ENABLING ALOW-CARBON ECONOMYWe help businesses andconsumers reduce theirenvironmental impactswith new applicationsand solutions.

ECO INEVERYTHING

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alcatel-lucent ceo ben verwaayen is

convinced that ict has a critical role to play

in tackling today’s global environmental

challenges. he has advocated the low-carbon

economy not just because it will benefit

the environment, but also as a major driver

of innovation and growth for the global

economy in the 21st century.

in 2011, Mr. verwaayen furthered his advocacy on this

issue by co-chairing the india Sustainability growth

Summit and continuing to chair the confederation of

british industry (cbi) climate change board.

recognizing the ambition of our environmental goals, we

are not pursuing them alone. alcatel-lucent is playing a

leadership role in open, collaborative partnerships and

forums with key stakeholders, and continues to tap into

bell labs’ ingenuity and expertise for eco-innovation.

together with our partners, we’re working toward

establishing broad sustainability strategies and initiatives

that will revolutionize our industry.

read more about alcatel-lucent’s commitment

to the environment:

fINd Out MOrE IN Our Cr rEPOrt

HEar wHat Our CustOMErs HavE tO say aBOut GrEEN

CallInG foR a loW-CaRbon eConoMY

“the world really needs growth, and you need to be green to grow.”

ben VeRWaaYenCHIef eXeCUTIVe offICeR

alCaTel-lUCenT

Play vIdEO

BrOadBaNd BrINGs GrEEN aNd GrOwtH tO lIfE

BEN vErwaayENCHIEf EXECutIvE OffICEralCatEl-luCENt

http://www3.alcatel-lucent.com/sustainability/reporting.html

http://bcove.me/facdwzl6

http://bcove.me/facdwzl6

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CURbInG neTWoRKs’ HUnGeR foR PoWeR

knowing the true environmental impact

of a product or solution requires looking

at its entire life cycle, from design and

development through manufacture to

operation and end of life.

having performed life-cycle assessments on all its major

product families — both for new products and whenever

an updated product is significantly different from the

previous generation — alcatel-lucent has found that the

use of a typical network product accounts for 80 to 90

percent of its total environmental impact, most of which

is associated with power consumption.

For that reason, we’ve made reducing the power needs of

network technologies the primary goal of our eco-sustainability

strategy. between 2008 and 2010, we improved our

products’ functional energy consumption by at least

20 percent, with many of our solutions exceeding that target.

and we’re confident we’ll be able to further increase the

energy efficiency of our key products by another 25 percent

by the end of 2012.

the end-to-end, energy-efficient life-cycle approach is

built directly into alcatel-lucent’s high leverage network™,

which gives service providers a simpler, better foundation

for their networks, making them less costly to operate,

maintain and evolve, with reduced power consumption and

the ability to make use of alternative energy sources.

lEarN MOrE aBOut tHE HlN stOry

dEvElOPMENt MaNufaCturING PaCKaGING dIstrIButION &

INstallatIONusE &

sErvICINGrECyClING

lIfE-CyClE assEssMENt

http://www2.alcatel-lucent.com/hln/

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MeasURe fIRsT…

…anD InnoVaTe WITH eXTReMe IMaGInaTIon

last year the european commission (ec), as part of

its digital agenda for europe key action 12, called

for industry volunteers to help establish a framework

for measuring both the energy intensity and carbon

footprint of the information and communications

technology (ict) sector. accurate measurement is an

essential first step toward identifying appropriate

solutions. as part of its commitment to environmental

responsibility, alcatel-lucent joined a consortium

with bt and cisco to test pilot three measurement

methodologies, using them to evaluate a wholesale

internet service offered by bt. alcatel-lucent’s aim

is to establish a common methodology for measuring

the carbon footprint of network telecommunications

products over their life cycles by end of 2012. to date,

we have introduced and are seeing the bell labs-

developed life-cycle assessment methodology gain

traction with industry consortia and reporting standards.

rEad MOrE ON tHE EC Call fOr vOluNtEErs HErE

lIstEN tO aN INtErvIEw wItH Bt

last year, bell labs organized a formal approach to what

it calls “extreme green innovation”, aiming to realize

dramatic improvements in network energy efficiency and

services through out-of-the-box thinking, development

of clean-slate architectures and open innovation

practices. today, bell labs’ green research involves more

than 75 scientists globally and more than 50 companies,

research institutes and universities — double the number

of researchers and five times the number of university

collaborations involved in green research in 2010. bell

labs has also more than doubled its number of research

projects with green as a major benefit. almost 10 percent

of all bell labs patent filings are now green-related, and

its researchers are on the technical program committees

of, or presenters to, most of the major green conferences

and workshops.

open innovation — the freely collaborative model in

which scientists readily exchange information — is also

at play in the greentouch™ consortium established

by bell labs in 2010. the goal of greentouch is to

develop the architecture, specifications and roadmap for

improving network energy efficiency by 1,000 — within

the next three years. greentouch now oversees 12

separate research programs and more than 25 projects,

spanning optical, wireline and wireless networking.

Play vIdEOGrEENtOuCH uPdatE NOv 2011GEE rIttENHOusE, Greentouch CHaIrMaN

http://ec.europa.eu/information_society/activities/sustainable_growth/2nd_call_volunteers_pilot/index_en.htm

http://www.youtube.com/watch?v=TwLE1-MlUKk

http://bcove.me/ahpaws3q

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HoW Can a neTWoRK sHRInK an InDUsTRY’s CaRbon fooTPRInT?

While information and communications

technology is directly responsible for just

two percent of total ghg emissions, the use

of that technology by other industries and

sectors — to deliver services more efficiently,

to allow people to work together without

having to physically be together — could

potentially cut global emissions by as

much as 15 percent.1

this is what alcatel-lucent refers to as “enabling a low-

carbon economy”. Some of the areas of greatest potential

we see are: the deployment of smart grids for power

utilities, increasing their real-time control over electricity

demand and consumption; intelligent transportation

systems that help transport and logistics companies

manage their fleets with supreme energy-saving efficiency;

and e-services for state and local governments to

administer functions like healthcare (through remote

care and patient monitoring), education (mobile learning),

public safety and more — enabling truly “smart cities”.

as always, the first requirement is to better understand

the potential of technology to deliver meaningful environ-

mental benefits. alcatel-lucent continued its work last year

to develop methodologies and standards for evaluating the

carbon-reducing potential of ict solutions in a wide range

of industries and sectors.

1. by 2020, according to the geSi and climate group report, Smart 2020.

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bIG sTePs ToWaRD a sMalleR fooTPRInT

our carbon footprint is the total volume

of greenhouse gas emissions (ghgs) we

contribute through our operations.

in 2011 we continued our efforts to cut back those emissions

through a whole range of initiatives involving our entire

workforce — achieving reductions of 11 percent by the

end of the year.

our longer term goal is to cut our direct carbon

emissions — those that fall into the GHG Protocol’s Scope

1 and 2 categories1 — to half of their 2008 levels by

2020. While Scope 3 emissions (those created through

our activities but not from sources under our direct

control) aren’t part of that target, we are fully invested

in reducing ghgs throughout our supply chain as well.

alcatel-lucent has been recognized by the environmental

investment organization (eio) for its leadership in

Scope 3 transparency. only three public companies in

the eio global 800 reported more on Scope 3 emissions

categories than alcatel-lucent in 2011.

lEarN MOrE aBOut tHE EIO

rEad MOrE aBOut Our CarBON fOOtPrINt

GHG Protocol: the most widely used international

accounting tool to understand, quantify and manage

greenhouse gas emissions.

1. the greenhouse gas Protocol (ghg Protocol) is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. a decade-long partnership between the World resources institute (Wri) and the World business council for Sustainable development (WbcSd), the ghg Protocol is working with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change.

http://www.eio.org.uk/etindex.php?page=overview1&ranking=Global_800


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2008 2012 2016 2020

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

24%

42%

50%

alCaTel-lUCenT THRee-PHase Plan To ReDUCe ITs CaRbon fooTPRInT bY 50% bY 2020in tons of co2

1. GEt Our HOusE IN OrdEr

improve onsite energy efficiency

reduce the use of air shipments

consolidate facilities

consolidate it servers

reduce business travel

2. asK MOrE frOM suPPlIErs

improve onsite energy efficiency

reduce the use of air shipments

consolidate facilities

encourage partner involvement

3. usE rENEwaBlEs fOr tHE rEst

use renewable energy

use renewable energy credits

▲ Since 2008, we have reduced our carbon footprint by more than 22%. 115 energy optimization

projects are underway at 27 of our largest facilities worldwide.

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fUll DIsClosURe

as part of our carbon-reducing work,

we report our emissions openly and

transparently to the international carbon

disclosure Project. in 2011, alcatel-lucent

scored 89 out of 100 possible points and

was named a carbon Performance leader.

We’ve also created an enterprise carbon accounting tool

that helps us streamline and automate ghg data collection,

identify opportunities for improvement, and identify best

practices for reducing emissions.

We take full advantage of optional Scope 3 reporting

and measurement, and have been recognized by the

environmental investment organization (eio) for our

leadership in Scope 3 transparency. While we don’t

have total control over Scope 3 emissions, we are taking

steps to improve our practices and encourage our supply

chain to be more carbon conscious. emissions related to

product logistics amount to more than 200,000 metric

tons of carbon dioxide equivalents per year: by moving

to a regionalized manufacturing model, by using more,

shorter-distance surface transport and by further shifting

freight from air to surface transit, we’re cutting our

carbon footprint. and by investing in video conferencing

systems at key locations, we’ve enabled faster and better

collaboration among employees — without the need for

emission-intensive business travel.

▲ in belgium, austria and Switzerland, we buy 100 percent

of our energy from renewable sources.

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oUR PeoPleDIVeRsITY Is a

DIffeRenTIaToR

Our business is global. Our customers are global.

And our approach to talent is also global. With a

diverse workforce spanning 130 countries, we proudly

draw strength from our plurality of perspectives and

experiences — because diversity fuels innovation.

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tHE POwEr Of dIvErsIty

“innovation comes from somebody saying, ‘Why are we doing it this way?’”

CHrIstEl HEydEMaNNEXECutIvE vP, HuMaN rEsOurCEs aNd traNsfOrMatION

looKInG foR MoRe DIffeRenCe

as an innovation company, we’re committed to growing our cultural, gender and demographic diversity to strengthen our capacity to perform.

already today, alcatel-lucent’s employees represent more

than 100 nationalities, working and operating in more than

130 countries.

to further promote diversity within the company, last year

we set the goal of increasing the representation of women

in management positions, building our leadership pipeline

of women, and assessing potential salary gaps between

men and women performing the same jobs.

We also launched a series of ‘generation diversity’

projects in several countries, aiming to produce a better

understanding of work habits and expectations associated

with different age groups. and we set up a global network

to connect the leaders of local initiatives focused on our

youngest employees to facilitate the exchange of ideas and

sharing of best practices related to generation diversity.

read more about our commitments to and achievements of

our people:

fINd Out MOrE ON tHE wEB

fINd Out MOrE IN Our Cr rEPOrt

“by promoting an agile workforce through open collaboration, training and development, alcatel-lucent

strengthens its capacity for innovation.”

CHRIsTel HeYDeMann eXeCUTIVe VP, HUMan ResoURCes

anD TRansfoRMaTIon

Play vIdEO

http://www3.alcatel-lucent.com/sustainability/people.html

http://www3.alcatel-lucent.com/sustainability/reporting.html

http://bcove.me/gbmhvqag

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all aboUT leaRnInG

People are our greatest asset. investing in their professional development and building a highly skilled and knowledgeable workforce provides a key competitive advantage for the company.

our human resources learning and accreditation

organization is dedicated to accelerating the performance

of our employees with timely, relevant and innovative

learning solutions. in 2011, alcatel-lucent university

delivered more than 16 hours of formal training per

employee, 40 percent of which was in a technology-

enabled format — on the web or through a virtual

classroom, for example. our flagship development and

accreditation program, People@alcatel-lucent, targets

business-critical roles with specific curriculum paths.

last year, 610 employees achieved accreditation status

for their respective functions, nearly double the 2010 total.

in october 2011, alcatel-lucent university organized a global

day of learning (gdol), a first-of-its-kind event to increase

awareness of the wide range, quality and importance of

learning opportunities available to alcatel-lucent employees

across the globe. More than 9,000 employees participated in

the full day’s schedule of live, virtual and recorded sessions.

alcatel-lucent university is changing the way people learn

with the introduction of its Personal learning environment

(MyPle), an innovative platform presenting employees with

customized suggestions for learning that are relevant to them

when and how they need it. in addition, the university

“1.3 million employee learning hours delivered

in 2011.”

WHaT MaKes a leaDeR?

in our experience, what makes a leader is attention, recognition and the opportunity to grow.

developing the talent of our workforce and attracting the

best and brightest to our company are integral to our hr

management approach. our new leadership Profile

highlights the skills and competencies we require of

leaders to meet our current and future business needs.

Potential candidates for senior positions within the

company are identified in our leadership Pipeline, which

not only identifies top talent but also helps move

individuals across boundaries and develops their skills

in numerous ways.

Structured corporate leadership development programs

focus on unlocking leadership capacity and effectiveness

and focus on each individual’s readiness level to take a

senior leadership role.

launched two peer-group learning pilot programs tied

to key roles.

in a world moving at the speed of ideas, learning must

keep pace. alcatel-lucent university is answering the

challenge, providing employees with the skills they

need to excel in today’s dynamic market.

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soCIal IMPaCTneTWoRKs THaT bUIlD

CoMMUnITIes

Our business is connection. It’s our responsibility to

seek out the ways our technology can improve the

communities around us: by meeting social needs,

bridging boundaries, and extending the benefits of

education, healthcare, energy and food security to all.

eRasInG THe baRRIeR of DIsTanCe

alcatel-lucent has a positive impact on the communities in which it operates, driven by its business vision to realize the potential of a connected world. our business is communication and connection, making the world a closer, smarter place. our innovative products, solutions and applications help accelerate socio-economic development through digital inclusion — extending access to information, as well as educational and economic opportunities for citizens and communities regardless of location — while being environmentally sustainable.

wHat CaN yOu dO wItH fIvE BIllION PHONEs?

saNdy PENtlaNddIrECtOr MIt MEdIa laB

Play vIdEO

http://bcove.me/e7fmf0qa

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MEdICINE ON tHE MOvE

in May 2011, alcatel-lucent teamed up with the

university of Pittsburg Medical center to develop a

next-generation telemedicine solution that cuts costs

and improves access to high-quality care — even when

patients are far from medical centers.

BrOadBaNd uNBOuNd

our lightradio™ solution reduces a cell site to nothing

more than a single antenna, laying the groundwork for

greener, simpler, lower cost mobile networks. that brings

the power of high-speed communications anywhere, to

anyone — helping bridge the digital divide.

sMall CEll, BIG IMPaCt

Small cells — also called femtocells — are low-power

radio access points that improve indoor and outdoor

mobile network coverage. trial runs in rural areas are

pushing the boundaries of how data and services can be

delivered, creating new opportunities for education and

income generation through mobile networks.

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THe WoRlD neeDs MobIle leaRnInG

only 25 percent of homes in developing countries have a computer — but soon enough almost everyone on the planet will own a mobile device. to explore the impact of increasing mobile technology adoption, in 2011 and 2012 alcatel-lucent’s rajeev Singh-Molares chaired the WeF global agenda council on ict.

the council’s report, developed in collaboration with global

experts and titled Accelerating the Adoption of mLearning:

A Call for Collective and Collaborative Action, explores how

the ict sector can help increase the adoption and scale of

mlearning projects. it found success will depend on:

• robust collaboration among governments, teachers,

private sector and individuals

• global implementation of mlearning projects, particularly

to reach the most vulnerable segments of society

• the ict sector playing a greater role to ensure the

success of mlearning, via collaboration between industry

and the mlearning community

rEad tHE wHItE PaPEr watCH tHE vIdEO

lIsTen To

THe WoRlD neeDsMobIle leaRnInG

http://www.weforum.org/reports/accelerating-adoption-mlearning-call-collective-and-collaborative-action

http://www.weforum.org/videos/ict-council-agenda

http://forumblog.org/podcasts/the-world-needs-mobile-learning

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mleaRnInG: a PoWeRfUl Tool foR GRoWTH In DeVeloPInG CoUnTRIes

beCaUse THe DIffeRenCe beTWeen URban anD RURal sHoUlD be a MaTTeR of PlaCe, noT oPPoRTUnITY

the mobile device has revolutionized how we communicate. long term, the biggest impact may well be the benefits to healthcare, banking and education. Peter Gabriel and rajeev Singh-Molares discuss the potential that mobile devices bring to education in emerging and developing countries.

our Market and consumer insight group conducted an in-depth study in india to examine how ict is driving the evolution of socio-economic development — blurring the boundaries between rural and urban. See how that paradigm shift is democratizing information and touching the lives of billions. Watch the video.

rEad tHE EXECutIvE PrEsENtatION

rEad Our latEst BlOGs

a ParadIGM sHIft

a video eXPloring the

WayS neo-urbaniZation

iS being Seen aS the key

to iMProving liveS and

oPPortunitieS in india and

other PartS oF the World

Play vIdEO

Play vIdEO

Peter Gabriel: yes, that Peter Gabriel.

mlEarNING: a POwErful tOOl fOr GrOwtH IN dEvElOPING COuNtrIEs

http://www2.alcatel-lucent.com/knowledge-center/admin/mci-files-1a2c3f/es/neo-urbanization_exec_summary.pdf

http://www2.alcatel-lucent.com/blogs/corporate/tag/neo-urbanization/

http://bcove.me/t1bembx2

http://bcove.me/smpsdycs

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MaKInG a DIffeRenCe WHeRe IT MaTTeRs

For a company to belong to a community, it has to participate in that community. alcatel-lucent is actively involved in the communities where it operates, both corporately and through the volunteer efforts of individual employees.

our philanthropic arm, the alcatel-lucent Foundation,

supported 46 grassroots programs in 23 countries in

2011. the Foundation focuses on digital inclusion,

sustainability and the delivery of digital literacy

programs for underserved communities around the

globe. one of its prime objectives is helping youth —

especially young women — access the education and

life skills development opportunities they need to

become responsible citizens and community leaders.

the people of alcatel-lucent volunteer both on and

off the clock. last year, our employees in 42 countries

donated 47,500 hours to volunteer projects, developing

new skills and sharing their expertise with local

communities — building pride in the company and

giving back to their communities.

read more about the alcatel-lucent Foundation:

alCatEl-luCENt fOuNdatION wEBsItE

IN Our Cr rEPOrt

THe alCaTel-lUCenT foUnDaTIon boaRD

as of december 31, 2011, the alcatel-lucent

Foundation board includes eight company

executives, one external trustee and the

chairperson. in 2011, board members were:

chairperson:

Janet davidson

alcatel-lucent trustees:

Stephan vantomme (treasurer), yohann benard

(Secretary), gee rittenhouse, christine diamente

(ex-officio), Frederic chapelard, Mark kassis,

Marco Malfavon. bishalakhi ghosh is the

executive director of the Foundation.

eXternal trustee:

William reese (chief executive officer

of the international youth Foundation)

http://www2.alcatel-lucent.com/foundation/


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GIVInG aRoUnD THe WoRlD

oTHeR GIVInG HIGHlIGHTs

our global charitable contributions policy gives our

offices and business units the freedom to donate funds to

worthwhile causes around the world — often in partnership

with our customers and suppliers. in 2011, alcatel-lucent

donated more than uS$2 million to projects addressing

everything from senior citizen health to housing issues

to autism research. Per the policy, all donations are fully

tracked and audited, and requests for contributions are

processed through the computerized eZ visit tool.

Old laPtOPs tO CHarItIEs

in 2011, our it department began a Pc refresh

Program to upgrade employees’ equipment. With

3,500 older but still functioning laptops retired, the

it department arranged for them to be donated to

various charities. around the world, our in-country

teams also donated school items, clothes, food and

other necessary items to non-profits and disaster

relief organizations throughout the year.

dIsastEr rElIEf GIft PrOGraM

in the wake of two natural disasters in 2011, the alcatel-

lucent Foundation instituted disaster relief gift programs

to match individual donations from our employees. the

program — administered by a third party — raised a total

of uS$20,000 in 2011.

KENya rEd CrOss

afflicted by its worst drought in 60 years, more than

three million people in kenya are in dire need of food

aid. the alcatel-lucent Foundation’s global Matching gift

program raised uS$173,864 for the “kenyans for kenya

initiative” of the kenya red cross Society last year.

ReaD MoRe

alCaTel-lUCenT Global CHaRITable ConTRIbUTIons aPPRoaCH

http://www2.alcatel-lucent.com/foundation/

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ConneCTInG YoUTH To leaRnInG

in april 2011, the alcatel-lucent Foundation

signed an agreement with World education

to start the global Signature program

connected. the goal: universal primary

education for all by 2015.

designed to address specific issues in targeted regions,

the program takes on the factors that limit the work and

life options of disadvantaged youth — particularly young

girls — using technology to transform the learning process.

currently, connected is helping train, educate and prepare

13,500 young people from marginalized communities in

australia, brazil, cambodia, china, egypt, France and india.

by March 31, 2012, our global Signature Program —

connected — provided digital training to 5,338 youths,

60 percent of whom are girls.

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sUPPlY CHaInoUR sUPPlY CHaIn,

oUR ResPonsIbIlITY

Alcatel-Lucent is fully committed to promoting

Corporate Responsibility throughout its supply

chain and, in particular, among suppliers —

the third parties who provide us with components,

products, software, support or services.

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ReQUIRe. assess. IMPRoVe.oUR CoMPReHensIVe aPPRoaCH To ResPonsIble PURCHasInG Has THRee sTePs:

read more about our commitments and achievements for a responsible supply chain:

ON Our COrPOratE sItE IN Our Cr rEPOrt

REQUIRESet clear CR requirementsfor suppliers, and integratethem into contractualpurchasing requirementsand produt or servicespeci�cations.

ASSESSTrack suppliers’ CRperformance throughCR ratings and on-siteaudits.

IMPROVECollaborate withsuppliers whoseperformance is not at the expected level to improve their standing.



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ReQUIRe

a strONGEr COdE Of CONduCt

early in 2011, alcatel-lucent introduced new standard

requirements for its suppliers. incorporating the electronic

industry citizenship coalition (eicc) code of conduct

revision 3, which addresses several key corporate

responsibility issues, the new code represents a significant

step toward implementing industry-wide standards.

rEad aBOut Our CONflICt MINErals POlICy

rEsPONsIBlE traCING Of CONflICt MINErals

in some parts of the world, the exploitation and trade of

minerals used to manufacture telecommunications equipment

— such as tin, tantalum, tungsten and gold — helps finance

or benefit armed groups, often with serious social and

environmental consequences. in 2011, alcatel-lucent

expanded its focus on ‘conflict minerals’ by instituting

a conflict minerals policy, participating in a multi-

stakeholder workshop coordinated by the organisation

for economic co-operation and development (oecd), and

started rolling out a due diligence program that leverages

eicc and global e-Sustainability initiative (geSi) tools.


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assess

suPPlIEr PErfOrMaNCE

our cr management system ratings are performed

by ecovadis, which specializes in sustainable supply

management solutions. based on internationally recognized

standards such as the global reporting initiative (gri) g3

and the un global compact, the ecovadis rating system

focuses on suppliers’ social, ethical, environmental, and

health and safety practices, as well as on the management

of their own supply chains.

suPPlIEr PraCtICEs

When necessary, alcatel-lucent conducts quality audits

that include corporate responsibility criteria. More

comprehensive audits dedicated solely to assessing a

supplier’s performance in corporate responsibility can

also be performed. on-site audits are typically done for

suppliers with significant weaknesses identified during

their cr assessment, or who present a high-risk profile

because of their activities or location.

to consistently evaluate suppliers’ ethical,

social and environmental practices,

alcatel-lucent applies an integrated

assessment approach that includes

risk analysis, cr management systems

ratings and on-site evaluations.

CR RISK ASSESSMENTBased on activity & location

CR RATING- Questionnaire- Documentation

IMPROVEMENTPLAN

FOLLOW-UP

ON-SITE AUDIT IMPROVEMENTPLAN

FOLLOW-UP

“alcatel-lucent has been one of our most innovative customers, always

pushing for improvements that could be leveraged by the global ict supply chain.”

PIeRRe-fRanÇoIs THaleRPResIDenT, ecoVadis

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tOtal NuMBEr Of suPPlIErsassEssEd ON Cr

NuMBEr Of suPPlIErsassEssEd

NuMBEr Of qualIty audIts(INCludING Cr)

2008 2009 2010 2011 2008 2009 2010 2011 2008 2009 2010 2011

1000300

200

100

300

200

100

800

600

400

200

0

401

676

885945

7046 57 58

124

278

188

100

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suPPlIEr PErfOrMaNCE tHrOuGH PartNErsHIP

We actively work with suppliers to

strengthen and improve their corporate

responsibility management, and require

suppliers with unsatisfactory ecovadis

ratings to draft and implement remedial

plans that address identified weaknesses.

We are committed to having 80 percent

of our suppliers earn a “satisfactory”

rating by 2014.

Our stratEGIC rElatIONsHIPs

in 2011, alcatel-lucent identified

strategic partners within its supply

chain and started developing new ways

of working with them, evolving from

traditional transactional relationships to

ones focused on collaboration. the goals?

to facilitate the development and sharing

of intellectual property and design

capabilities to create an environment that

encourages innovation and sustainability.

Our dIalOG wItH suPPlIErs

to strengthen its supplier ecosystem,

alcatel-lucent held its 2011 global

Supplier convention in Shanghai, china.

under the theme Engage, this event gave

suppliers a richer understanding of our

market, strategy and expectations.

ecovadis described its assessment

methodology and criteria to attendees

from 20 chinese suppliers whose systems

have been or will be assessed. at a second

workshop in Shanghai in november 2011,

participants from 15 different organizations

looked at ways of developing their

capabilities related to sustainable and

responsible business practices.


IMPRoVe

2011 alCaTel-lUCenT sUPPlIeR ConVenTIon

last year, this annual event attracted 140 of our

suppliers, who together account for 90 percent

of our production spend.

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impact onthe world

BEll laBsrEPOrt

voice of thenetwork

research highlights discovery stories in memory - dennis ritchie

ReseaRCH HIGHlIGHTsbeYonD THe fRonTIeR

To be a Bell Labs scientist is to be something

of a time traveler. You spend at least some

of your time in the future: extrapolating from

today what life — and its technology demands

— will be years down the road.

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impact onthe world

BEll laBsrEPOrt

voice of thenetwork


in 2011, bell labs teams conducted the

world’s first tests of optical MiMo (multiple

input, multiple output), initially over tens of

kilometers and then over more than 1,000

using advanced optical amplification. bell

labs scientist Peter Winzer explains what

optical MiMo is — and why it matters.

“My bell labs colleague, gerard Foschini, invented MiMo

in 1996 as a way of dealing with the interference that gets

created when you have many people using cell phones

— all transmitting at the same frequencies. MiMo helps

sort out the signals. imagine it this way: you have four

loudspeakers playing four different songs in a room full

of echoes. a single microphone placed at any point in the

room wouldn’t likely be able to receive any of the four

songs in a clear manner. but by using four microphones

at different locations in the room, the received signal

mixtures can be jointly processed to clearly pick out all

four songs without interference from any of the others.

MiMo is well established in the mobile world. at bell labs,

we’ve started looking at it for optical networks. Some

people might wonder why, because there’s not usually any

interference between fibers in an optical cable. yet. but in

the not-so-distant future, we can see interference becoming

a problem as we try to squeeze more capacity out of those

cables. technically, this could come either from condensing

multiple fibers into a single optical waveguide, or from

sharing optical amplifiers among multiple parallel optical

channels. the point is that we’ll need a way of making sure

any interference, or ‘crosstalk’, is removed so information

can be received clearly. going back to our example of the

four speakers: optical MiMo brings that kind of error-

correction capability to the network. by researching

it today, we’ll have years of r&d behind us when the

industry eventually needs an optical crosstalk cancellation

solution. We’ll be there, ready to deliver.”

oPTICal MIMo

“we’ll have years of r&d behind us when the industry eventually needs an optical

crosstalk cancellation solution.”

PeTeR WInZeRbell labs sCIenTIsT

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impact onthe world

BEll laBsrEPOrt

voice of thenetwork


tod Sizer, the bell labs inventor of lightradio™,

describes how this revolutionary mobile

network technology went from concept to

product in the space of a single year.

“More and more people are using their cell phone as their

only means of accessing cloud-based services such as video

streaming, gaming and video communication. and they’re

using these services simultaneously. So the amount of

information coursing through the world’s mobile networks

is exploding. over the next four years it could increase by a

factor of anywhere from 30 to 80, which is unprecedented.

lightradio was invented by asking the question: ‘Where will

mobile networks get the capacity to deal with this?’

lightradio represents a major shift in the approach we’ve

been taking for the past 30 years. instead of having one

tower serve hundreds of users, it has many tiny antennas

reaching smaller groups of people. in 2010, bell labs

developed a prototype for the lightradio cube, which is an

antenna so small you can hold it in your hand.

it can go almost anywhere, be combined with other cubes

to make a mini-tower of whatever size and strength

you need. there was a lot of interest in the cube when

we launched it in early 2011, and we’ve spent the past

year working closely with our product team colleagues

in alcatel-lucent to turn the prototype into a real-world

solution our customers can deploy. For me, going from

a prototype to a working product in that space of time

is unheard of. What’s exciting is that now customers are

seeing the possibilities and thinking up applications for

the cube on their own — so that we’re working on several

variations: ones that transmit at higher power for longer

distances, or ones that can handle multiple types of

transmissions simultaneously. our customers are helping us

decide how to take lightradio forward.”

lightRadio™

▲ yes, this is a mobile network

antenna. this compact

array of five lightradio™

cubes could be deployed

unobtrusively just about

anywhere, connecting

hundreds of mobile devices.

▲ While most scientists prefer the lab to the news conference, innovators like bell

labs’ tod Sizer have gotten used to sharing their stories with the world.

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in november 2011, less than a year after

it was created, the greentouch™ consortium

conducted its first test of energy-efficient

network technology, with results that

validated both the consortium’s innovative

thinking and its collaborative approach.

greentouch chairman gee rittenhouse

tells the story.

“a few years ago bell labs asked the question, ‘What’s

the minimum amount of energy a network needs?’ it

took about six months to do the math, and when we

were done, we were shocked. today’s networks could

be 10,000 times more energy efficient than they are.

that’s the theoretical limit. even if we never reach

that limit, there’s obviously huge room to improve.

So we set a goal of making networks 1,000 times

more energy efficient, and realized that to do so we

needed the full range of industry players involved. i

was amazed: within two months we had 14 founding

members, and the greentouch consortium was born.

because mobile networks need the greatest efficiency

boost, we decided to concentrate our first demonstration

project in that area. the thinking was that we could

improve energy efficiency by adding antenna systems

to a mobile network — which seems a bit counterintuitive

because you would think more components means more

power. but we took our large-scale antenna system demo

to bern, Switzerland, and ran a test in november 2011 that

proved you could increase energy efficiency by using many

antenna arrays instead of single antennas. it was a great

first step. i am proud to say there are many brave industry

leaders who have dedicated themselves to the consortium.

it’s a true collective effort.”

GreenTouch™: laRGe-sCale anTenna sYsTeMs

“we don’t wait to adapt to the future. Our job

is to define it.”

JeonG KIMPResIDenT, bell labs

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by harnessing some of the subtlest aspects

of physics, researchers hope to create

processors that can calculate in seconds

what would take today’s supercomputers

years to work out. last year, bell labs

scientists made an early breakthrough,

explains Martin Zirngibl.

“quantum mechanics is the foundation of much of

the technology we have today, from semiconductors

to lasers. but some of its more…paradoxical…aspects

are challenging to apply. one of those is the idea of

‘entanglement’ — that two particles, even if separated

by vast distances, can affect each other’s behavior.

it’s a provocative idea. einstein never accepted it

because it violates the notion that nothing is faster

than the speed of light. but it’s been proven to be

true, and richard Feynman in 1982 said it could be

used in computing. ever since, researchers have been

trying to figure out how to use entangled particles to

represent the quantum equivalent of ones and zeros

to perform superfast calculations.

because a quantum state is typically very low energy

and fragile, it decays as soon as you observe it. So what

our team has been trying to do is create larger-scale

quantum states using groups of particles rather than

single particles. these are more robust. to be legitimate

quantum states they have to have certain statistical

properties, and in the past year we achieved this in bell

labs. our results are currently being verified by other

researchers and, if confirmed, will mark an important

step toward realizing the possibility of a new type

of quantum computing. to put the power of these

computers in context: the world’s strongest security

encryption today could be cracked in seconds by a

quantum computer. extremely complex trends — weather

patterns, chemical reactions — that we simply can’t

break down finely enough with today’s technology

could be made sensible by quantum computers.”

quantum mechanics: the field of physics that emerged

out of the work of scientists in the 1920s is based on

growing understanding of how particles behave at the

subatomic level.

QUanTUM CoMPUTInG

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DIsCoVeRY sToRIes

Science is mostly a process of trial and error.

But every once in a while, researchers experience

a true “aha” moment when something long hidden

is revealed. These are stories of such moments —

and the Bell Labs scientists behind them.

tHE IMPaCt OPPOrtuNItyMOrItZ stEINErMts, NEtwOrK tECHNOlOGIEsBEll laBs rEsEarCH

lOOKING fOrwardaNtONIa tulINOMts, aCCEss tECHNOlOGIEsBEll laBs rEsEarCH

lIvING aNd BrEatHING INNOvatION sErIEs - CloudBand™

tHE PaCE Of PrOGrEssBOB wIllEttdMts, PHysICal tECHNOlOGIEsBEll laBs rEsEarCH

Play vIdEO

Play vIdEOPlay vIdEOPlay vIdEO

http://bcove.me/umczkpll

http://bcove.me/e5uic8q9

http://bcove.me/otsqe5tk

http://bcove.me/b4goav0p

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at the beginning of the 1990s, Foschini’s boss at bell

labs came to him and said, “i want you to work on

the fundamental limits of whatever communications

systems we’re working on,” which at the time included

mobile networks.

Foschini explains, “i was trying to figure out what the

capacity of a wireless system might be: how much can

you communicate between one user and another using

a certain frequency, at a certain power?”

understanding information theory, communication

theory and mathematical algorithms but not so

much about antennas, Foschini went to his bell labs

colleague, Michael gans, and explained the challenge.

“i want information theory to tell me what antenna i

should be using,” Foschini said. gans suggested that

rather than one single antenna he should imagine

using a number of elemental antennas in concert.

Foschini crunched the numbers and found that if

you add more antennas, the capacity of the network

increases up to a point without needing any more

bandwidth or power. What’s more, he found that

capacity was beyond what anyone had previously

imagined possible. the only problem was that in

a mobile network, every antenna receives all the

signals in the air at any given time.

“i was looking at the formula, and it said there should

be all this capacity, but we couldn’t figure out how

to make it happen in the real world because of the

crosstalk,” Foschini says.

he recalled an old mentor who used to liken a math-

ematical formula to a dog barking. (imagine lassie.)

“you know it’s trying to tell you something, but you

can’t understand.

WHen THe foRMUla baRKs, PaY aTTenTIonone of Gerard foschini’s early assignments had to do with “crosstalk,” the interference that

occurs between bundles of paired wires in a phone system. he found it interesting: analytical

math applied to a real-world problem. What he didn’t realize was that it would give him the

foundation for one of the most significant projects of his career some 25 years later.

BIOGraPHy

gerard Foschini joined bell labs in 1961 with a bS in electrical engineering – a good basis for a technical career.

but his burning desire was to get into research. he went off to obtain his Phd in Math and returned in 1962.

“I thought about wireless transmissions as a kind of writing in space-time:

the spatial part correspondsto the set of transmitantenna elements.”

GeRaRD fosCHInI InVenToR of MIMo anD

bell labs sCIenTIsT

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So you really have to pay attention…” in the wireless case,

Foschini knew the formula. he kept working away at

simplifying it, and eventually hit on his “aha” moment.

Foschini recalled, “different cultures have different ways of

writing, such as left-right, right-left, horizontal, or vertical.

i thought about wireless transmissions as a kind of writing

in space-time: the spatial part corresponds to the set of

transmit antenna elements. i realized it’s the signal that

interferes with itself as it makes it way to the receiver.”

Foschini’s solution was to enhance the ability of receiver

antennas to read what’s “written” by the transmit signals

to avoid the different parts of the signal interfering with

another. at the same time, the presentation must avoid

an explosion in the complexity of the task the receiver

confronts in decoding the message.

accomplishing all this while adhering to the formula

amounted to following a “blueprint”. after carefully

puzzling over this blueprint, it came to him that not right,

left, horizontal or vertical, but rather writing the message

diagonally on the “page of space-time” was just the ticket.

the formula had barked and the seeds of wireless MiMo

were sown. Soon the strategy was in place to deploy

wireless MiMo to massively increase the capacity of

mobile networks.

today, Foschini is contributing to Peter Winzer’s work

on a variation of MiMo for optical networks, a next leap

forward that will extend the same kind of capacity boost

to the fiber communications world as Foschini’s original

discovery did in wireless.

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the idea for “the cube” — which would become the

heart of the lightradio™ concept — came to Sizer after

years of working on the problem of how to get more

performance and capacity out of wireless networks.

“there are only three ways you can increase the amount

of data,” Sizer says. “one is to get more spectrum, the

range of frequencies available to transmit over. but the

amount of spectrum is finite, so there’s a limit. another

is to make the channel more efficient, and we’ve been

doing that, but the reality is we’re working very close to

the theoretical limit of what’s possible. the third option

builds on gerry Foschini’s MiMo concept, which is to

use multiple antennas to reach smaller groups of people

instead of large, single antennas to receive and transmit

information between hundreds of users.”

but the nature of the antennas was still an issue.

nobody, Sizer points out, wants 10, 30 or 80 more

cell towers in their neighborhood.

“We needed to make a solution so small as to be invisible

— but still give people five bars on their phones.”

So he worked and reworked the math to determine

the smallest theoretical dimensions an antenna might

have. that led to the “eureka moment” of the cube —

and the “crazy” challenge Sizer issued his team.

While they may have thought it impossible at first look,

Sizer says, “i lead a spectacular group of researchers.

they had it done in three months.” Making the physical

cube, even as a block of wood, gave everyone a clear

vision of the challenge and the opportunity.

it was another challenge to whisk the lightradio cube

from prototype to product — a process that, end to

fRoM THIs bloCK of WooD, ToMoRRoW’s MobIle neTWoRK

a traditional cell tower can be upwards of 40 feet tall —

sometimes hundreds of feet.

PLAY VIDEO

LIVING AND BREATHING INNOVATION SERIES –

LIGHTRADIO™

one day in 2010, tod Sizer convened a meeting of his research team at bell labs. he plunked

several small wooden blocks onto the table — he’d cut it in his woodshop the night before —

and said, “We need to build a mobile network base station that looks like this.” “My team told

me i was crazy,” he chuckles.

“we needed to make a solution so small as to be

invisible — but still give people five bars on their phones.”

ToD sIZeRHeaD of bell labs

WIReless ReseaRCH

lIvING aNd BrEatHING INNOvatION sErIEs – lightradio™

Play vIdEO

http://bcove.me/6ohnsuoh

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end, took just nine months. Sizer says that with people

now able to deploy the cube in the field and test it

out, his team can identify where it works well, where

it needs more innovation.

he says the “mandate” of the cube is also expanding.

in the beginning, the motivation was capacity: how to

bring more of it to mobile networks.

today, he notes, it’s not just about how many calls or

texts you can transmit, it’s about handling them in a way

that’s profitable for the network operator. deployment

models influence business models, and vice versa.

Sizer notes that the lightradio cube marks a further

blurring of the lines between wired and wireless

networks. With many smaller cells or antennas in

play, they all need to be connected by a high-capacity,

highly reliable fixed network.

“Wireless networks are becoming wired with a little

wireless at the end, and wireline is going wireless,”

he observes. “i think this is a space that’s ours to win

because we have a strong portfolio in both areas.”

reflecting on the mission of bell labs and the rapid path

to market of lightradio, Sizer thinks the organization’s

research needs to span innovations that may be

applicable in the next two to five years as well as those

that look farther out to the next 10 or so.

it’s one part seeing the future, and one part making it

real — in response to the demands of the here and now.

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In MeMoRY:DennIs RITCHIe

ReMeMbeRInG a RoCK sTaR

DENNIS RITCHIE, BELL LABS INNOVATOR

1941 – 2011

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dennis M. ritchie was a pioneer in every sense of the

word. the bell labs scientist who passed away last

year at the age of 70 left the world with an impressive

list of achievements to his name.

he and long-time colleague ken thompson created the

uniX® operating system — today the oS of choice for

the internet and the foundation of many of our most

cherished digital devices, including the iPhone,1 iPad2

and the google3 search engines. ritchie went on to

develop the second-most used programming language

in the world — c, precursor to c++ and Java.

born in bronxville, ny, ritchie joined bell labs in

1967, armed with a bS and advanced degrees from

harvard. over the course of his career he received

countless awards and distinctions, including ieee Piore,

hamming and Pioneer medals; recognition as a bell

labs Fellow; an association for computing Machinery

turing award; a u.S. Medal of technology; the u Penn

harold Pender award; and the Japan Prize in 2011 —

all shared with ken thompson.

during his opening remarks on the presentation of the

Japan Prize to ritchie, bell labs President Jeong kim said,

“the spirit you instill in all of us to pursue our dreams

exemplifies the best of bell labs and its researchers,

and sets us apart from other research organizations

around the world. to us, you are a rock star.”

1. iPhone is a trademark of apple, inc., registered in the u.S. and in other countries.2. iPad is a trademark of apple, inc., registered in the u.S. and in other countries.3. google is a trademark of google, inc.

WHaT Does IT Mean To be a PIoneeR?you have to be willing to go places no one has gone before. you have to accept that the rules

are yours to invent as you go along. and probably above all, you have to have the inner

conviction that where you’re headed and what you’re building is going to be worth the effort.

“the spirit you instill in all of us to pursue our dreams

exemplifies the best of Bell labs and its researchers,

and sets us apart from other research organizations

around the world. to us,you are a rock star.”

JeonG KIMPResIDenT, bell labs

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bell labsreport

vOICE Of tHENEtwOrK

VoICe of THe neTWoRK

What we do at Alcatel-Lucent changes the world around

us. Technologies that did not exist in the public domain ten

years ago are now at the center of our everyday lives. How

can you capture the way in which our technology translates

to millions of interactions, every day, all over the world?

This year, we have asked Douglas Coupland, writer and

artist, together with the musician Paul Humphreys, to bring

the data that represents network usage to life through an

audio visual installation. Together they have responded

by creating ‘Electric Ikebana’, an artwork that captures the

spirit of innovation that lies at the heart of our company.

www.alcatel-lucent.com alcatel, lucent, alcatel-lucent and the alcatel-lucent logo are trademarks of

alcatel-lucent. all other trademarks are the property of their respective owners. the information presented

is subject to change without notice. alcatel-lucent assumes no responsibility for inaccuracies contained herein.

copyright ©2013 alcatel-lucent. all rights reserved. cc2013040834 (May)

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