Alcatel and TCL joint venture

TCL Communication Technology Holdings Limited and Alcatel announced the signature of a memorandum of understanding ("MOU") to form a joint venture mobile handset company.

The two groups have decided to join together their strengths in the mobile handset industry. TCL Mobile is one of the leading players in China with extensive sales and distribution network, manufacturing base and fast-growing business in Asia. In the mobile handset marketplace, Alcatel is world-renowned brand, which has established relationships with global carriers and distribution networks.

The estimated net asset value of the joint venture company at closing is expected to be Euro 100 million. The formation of the joint venture company involves contributions from both shareholders, of Euro 55 million by TCL Communication and Euro 45 million by Alcatel. In the venture TCL Communication will contribute cash and Alcatel will contribute cash and its mobile handset business.

The formation of the new venture is expected to be completed during the third quarter of 2004, subject to the signing of definitive agreements and necessary approvals by shareholders and regulatory authorities.