MILAN, Italy, December 1, 2004 - Cisco Systems and its strategic alliance partner, Italtel, today announced the introduction of a joint network transformation solution designed to help service providers to migrate their telephone networks to an Internet Protocol (IP) platform on which they can build flexible managed IP voice services for large enterprises and small to medium-sized businesses (SMBs).

Italtel-Cisco Business Voice Solution (BVS) provides a carrier-class IP communications platform on which service providers can generate new revenue streams by offering IP voice and video telephony, conferencing, unified messaging and IP call centre services, through a wide range of hosted and managed services models. Synergy Research Group, Inc. has forecast a compound annual growth rate of 40.4% for 2004 to 2008 for the EMEA Enterprise IP Telephony market, creating an EMEA market value of $3.5 billion in 2008*.

"The pressure to replace dwindling voice and access revenues with higher margin services is focusing all service providers' minds on delivering new managed services and applications, particularly managed IP voice services layered over data networks," said Enrico Deluchi, Managing Director, EMEA Business Development and Marketing, Service Provider Wireline, Cisco Systems. "Today's announcement is a clear demonstration of how our alliance with Italtel is producing innovative solutions which address both revenue generation and operating cost savings. It is designed to give service providers the ability to deliver value-added business voice services and to provide a cost-effective migration strategy to transform legacy telephony networks into a cost-competitive next-generation network."

Antonino D'Angelo, Italtel Chief Technology Officer, added: "Through our close collaboration with Cisco, we have developed a compelling architecture for hosted and managed IP voice services with a standards-compliant next-generation network platform. This solution allows enterprises to obtain competitive advantages through increasing their productivity and giving them new advanced, integrated voice/video/data services in an ubiquitous way. Cost savings and out-tasking of non core activities are also important factors for choosing the Italtel/Cisco solution."

Telecom Italia is deploying the Italtel-Cisco BVS platform to introduce innovative VoIP solutions to medium and large enterprises.

Italtel-Cisco BVS is the result of close integration of the Italtel Multi-Service Solution (iMSS) platform, that includes the Italtel Softswitch, with Cisco IP communications technologies, incorporating IP telephones, CallManager call-processing systems, Integrated Services Routers, Catalyst switches, VoIP gateways and centralised Operation / Billing services. Through this unified Next Generation Network platform, service providers can deliver business voice services and other new revenue-generating services in conjunction with migration to a classless switching network.

Italtel-Cisco BVS makes it possible for service providers to meet a wide range of customers' needs, from a completely hosted and managed model, to a mix of managed and self-managed services. It also provides a smooth migration path for customers who want to gradually phase out their legacy PBX systems.

About Cisco Systems

Cisco Systems, Inc. (NASDAQ: CSCO), the worldwide leader in networking for the Internet, this year celebrates 20 years of commitment to technology innovation, industry leadership and corporate social responsibility. Information on Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com. Cisco equipment in Europe is supplied by Cisco Systems International BV, a wholly owned subsidiary of Cisco Systems, Inc.

About Italtel

Italtel designs, develops and installs new-generation integrated multi-service networks (voice/data/video) ensuring fixed and mobile operators and ISPs reliable and open to networking and technological developments infrastructures, thanks to its systems integration capability. In the last ten years Italtel has invested a significant part of its revenues in innovation. Revenues for 2003 totaled 591.8 million euro. Since 2000, Italtel main shareholders are Clayton, Dubilier & Rice, Telecom Italia and Cisco Systems. Website: www.italtel.com

Cisco, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners.

Italtel, Italtel logo and iMSS are registered trademarks of Italtel S.p.A.

* Synergy Research Group's Enterprise IP Telephony forecast is primarily built upon the displacement of Tradition TDM equipment. In EMEA, Synergy has measured current rate of penetration at 21.9%, modelled the forecast to reach a penetration of 30.0% in 2004 and to further reach a penetration rate of 83.0% in 2008. Also taking into account forecasted EMEA GDPs and a stable and/or growing rate of IT capital investment as component of GDPs, SRG is forecasting the EMEA Enterprise IP Telephony forecast to be robust with a CAGR of 40.4% (2004 to 2008) creating an EMEA market value of $3.5 Billion in 2008. (Source: Q1 2004 Enterprise Voice EMEA Forecast, Quarterly Update published 6 June 2004, Synergy Research Group, Inc.)