Paris, June 19, 2012 – As smartphones and other portable devices that use cellular networks grow in popularity for making video calls, watching television and connecting to gaming services, Alcatel-Lucent’s (Euronext Paris and NYSE: ALU) femtocells will enable Telefónica to enhance mobile voice and broadband Internet services for use in homes and workplaces throughout Europe and South America.

Demand on Telefónica’s 3G networks is expected to increase dramatically in coming years as mobile video usage soars in both Europe and South America, due to the adoption of mobile devices and the major forthcoming sporting events this summer and over the next couple of years in both continents.  Research conducted by Alcatel-Lucent shows that the majority of this video-consumption will take place indoors, within residential and enterprise premises.

To cope with this demand, Telefónica has chosen to deploy 3G femtocells from Alcatel-Lucent.  Femtocells are plug-and-play units no larger than a typical Wi-Fi router and can easily be installed by the user.  They extend the operator’s network into residential or enterprise buildings, increasing both voice quality and the capacity for mobile broadband services, such as watching high definition sport coverage streamed live.

Alcatel-Lucent’s femtocells will serve Telefónica by introducing capacity into hard to reach indoor locations in the most cost and energy efficient manner, while also reducing congestion from their macro network.  Telefónica’s customers will also enjoy a double-benefit: Their devices will deliver voice and multi-media content indoors with greater speed and consistency.  Additionally, device battery life will be extended due to the shorter distance that devices need to transmit to the nearby femtocell.

Ian Miller, Radio Access Network Director of Telefónica said: “Telefónica is committed to providing our customers with the most innovative solutions to deliver the services they want with the quality of experience they expect. With upcoming major sporting events such as the London 2012 Olympics and 2014 FIFA World Cup being held in Brazil, our customers’ demand for services is set to grow even further.”

Federico Guillén, President Alcatel-Lucent Spain and Global Account Manager for Telefónica said: “Alcatel-Lucent’s innovative femtocell portfolio helps service providers relieve stress on their cellular networks while allowing them to meet the growing demands for mobile data.  Using our industry leading femto and metro cell portfolio, operators can deliver an enhanced quality of experience to subscribers and help them stay connected, wherever they are.”

As global demand for mobile services continues to rise, Alcatel-Lucent is providing operators such as Telefónica with a clear, efficient evolution path for mobile broadband with its groundbreaking lightRadio™ and femtocell portfolio. Alcatel-Lucent’s femtocells  portfolio includes residential and enterprise femtocells, and metro cells for higher capacity, planned deployments in outdoor environments and large indoor environments such as shopping centres, airports and train stations.  All femto and metro products support 3G, WiFi as an option, and a smooth evolution to 4G LTE.

Under the framework agreement, Alcatel-Lucent will provide Telefónica with its residential and enterprise femtocells.