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Pirelli Cavi e Sistemi SpA and Alloptic Inc., the leading start-up providing IP, Gigabit Ethernet fiber optic solutions for access networks, announced today at SuperComm 2001 in Atlanta that they have signed an agreement to develop new optical solutions for access networks and fiber-to-the-home applications.

Under the agreement, Pirelli will invest US$12 million in Alloptic and will have one member and one observer on the Alloptic Board of Directors.

Pirelli will promote and distribute products and solutions originating from the alliance under its own brand outside of North America, and Alloptic will promote and distribute products and solutions originating from the alliance under its own brand in North America. In addition, both companies will also co-market in North America a unique joint solution combining the Alloptic fiber access platform and Pirelli's fiber optical cables and systems. The alliance will ensure seamless worldwide customer relationship management and give network providers a single source for a complete fiber optic access solution that includes fiber optic cable, optical interconnects and optical network equipment.

"We believe that this alliance with a fast-growing, leading-edge start-up will contribute strength to our market position," Kevin E. Riddett, General Manager of Pirelli Telecom Cables and Systems, said. "Pirelli is now able to offer a broader range of state-of-the-art technologies and more advantageous solutions to its customers."

Tom Engdahl, President and Chief Executive Officer of Alloptic, added, "While this alliance spells success for both Pirelli and Alloptic, the true winner is the network provider. The strength of this joint solution is the immediate economic benefit it gives to them. The Pirelli-Alloptic alliance will deliver a clearly optimized, radically faster solution that will allow network providers to deliver revenue-generating, converged services at speeds and the cost required to maintain subscriber satisfaction."

Pirelli and Alloptic will offer an optimized, packaged solution designed to enhance the buying power of network providers. The alliance will build on Pirelli's proven leadership in delivering point-to-point fiber-to-the-home solutions and its leading position in the world cable and fiber market, while Alloptic brings leading-edge technology with an unprecedented 1.25 Gigabit/sec of symmetrical bandwidth over a Passive Optical Network (PON).

Pirelli and Alloptic technologies will be fully integrated to provide next-generation fiber-to-the-business, fiber-to-the-curb, fiber-to-the-home and networking services. The combination of Pirelli and Alloptic technologies will allow innovative purely optical -- and inherently broadband -- links to be provided to end-users. Alloptic and Pirelli also will finance research and development projects to further enhance their technologies for optical signal access and distribution.

About Pirelli
Pirelli is a global manufacturer of telecom and energy cables and systems and of tires. With 41,000 employees, 87 plants, research and development centers in Italy, the United States, France, Great Britain and Brazil, and total sales of Euro 7.477 billion (more than US$7 billion), Pirelli ranks among the world leaders. The company is increasingly focusing its R&D and manufacturing resources and competencies on leading-edge technologies, based on optical fibers for communications networks and superconductivity for power transmission

Pirelli Cables & Systems North America, 700 Industrial Drive, Lexington, SC 29072. Tel: 803-951-4800; Fax: 803-957-4628.