News release

HP Drives New Business with Communication, Network Provider and Technology Customers Worldwide

Leadership in Key Technologies Results in Continued Momentum Despite Difficult Market Conditions

PALO ALTO, Calif., May 7, 2002

HP (NYSE: HPQ) today highlighted its strengths with communications and technology customers. As a part of this emphasis, HP announced that, against a very tough economic backdrop in the sector and uncertainties created by the merger, major communications and technology customers signed contracts totaling nearly $2 billion in revenue in the last three months with standalone HP and Compaq, signaling their confidence in the merged company. The new HP will continue to play a lead role in helping the world's foremost communication, network provider and Internet companies strengthen customer loyalty, attract new subscribers and improve operations and service.

"Our high-end enterprise solutions drive many of the most mission-critical environments in the world -- and nowhere is that more true than with customers in communication and technology industries," said Peter Blackmore, executive vice president, HP Enterprise Systems Group. "HP solutions and technology are deeply embedded in the corporate infrastructure of the world's preeminent telecommunications and Internet companies, doing the heavy lifting for tens of millions of wired and wireless telephone users and hundreds of millions of Internet users."

Leadership with Technology and Services

The new HP is uniquely positioned to be the worldwide leader in "mobilizing" customers, thanks to the tremendous breadth and depth of the company's technologies and services combined with strong relationships with key service providers and key industry alliances.

HP is a leader in enterprise mobility based on its end-to-end capabilities, which are very attractive to companies looking for turnkey solutions that deliver benefits quickly. HP wireless access devices -- such as Pocket PCs and wireless notebook PCs -- deliver industry-leading functionality into the hands of end users. This technology leadership scales up to the largest NonStop servers used in the most sensitive, mission-critical environments, including 90 percent of all stock exchange transactions in the world. Also, HP offers an array of wireless enterprise mobility solutions, partner relationships and professional services.

The tremendous capabilities the new HP brings to the telecommunications industry can be seen in the following examples:

• HP systems at telecommunications companies process 200 million credit card and collect phone calls per day;
• HP systems handle 80 percent of the billing and customer care in Europe and the majority of all 911 emergency calls in the United States;
• More than 70 million cellular phone users rely on home location register capability from HP to complete their calls, without ever knowing it;
• HP has carrier grade relationships with more than 200 major communications companies, including many of the largest 50 in the world;
• HP is the number one supplier for intelligent network systems, with 39 percent market share in service control points.

"Leading companies throughout the world are investing in a wide array of HP technologies and services," said Blackmore. "Customers are investing in solutions built on the broadest array of solutions, platforms and professional services of any company serving these markets."

HP solutions are built on NonStop, high-performance and industry-standard servers; advanced storage products, software and storage area network (SAN) implementations; outsourcing, consulting and professional services; as well as a full range of desktop, notebook and handheld systems. HP also works closely with leading technology partners to jointly develop and promote new services and solutions for specific industries.

Leadership with Customers

In the huge communication, network and technology markets, business enterprises clearly see the benefits of anytime, anywhere information access. Leading companies in these industries are deploying the extensive wireless infrastructure needed to link mobile professionals with company email, enterprise resource applications, intranets and the full power of the Internet itself.

Nokia, the world leader in mobile communications, recently signed a $260 million agreement with HP for professional services. Other recent successes with customers include Vodafone UK Limited, which is operating a digital cellular radio network with 12.8 million customers and deploying the company's TeMIP (telecommunications management information platform) solution to provide network and services management. HP Services will integrate the solution into Vodafone UK's network. In addition, the telecommunications company in China's Szechwan province entered an agreement worth more than $100 million.

Other examples of groundbreaking deployments using technology and services from the new HP demonstrate the company's momentum with new business, cross-industry support and worldwide acceptance by enterprise customers:

Americas

• The RackShack subsidiary of Everyones Internet is deploying industry-standard ProLiant servers running Linux and Ensim's WEBppliance(TM) in an agreement valued at $20 million. The project includes immediate installation of 1,000 servers followed by an additional 8,000 to 10,000 servers over the next two to three years.
• Bell Canada purchased three 32-way HP Superdome systems, valued at nearly $16 million, to run their SAP applications.
• Empresa de Telfonos de Bogota (ETB) is one of the largest network service providers in Colombia. HP is implementing a solution-based mediation and data collection system that includes upgrades on installed HP systems and the billing mediation platform.
• GVT offers voice, Internet and data transmission services in several regions of Brazil. After successfully implementing a modern technology infrastructure for GVT, HP was selected to develop and implement a business assistance service center with responsibilities beyond traditional help desks to centralize suggestions, questions, problems and requests for new projects. The center receives an average of 8,400 calls per month and the time to assist users has been reduced by 30 percent.
• OptiGlobe, the largest Latin America service provider for mission-critical operations and data centers, worked with HP to implement complete solutions in the company's data centers in Sao Paulo, Rio de Janeiro and Buenos Aires. HP supports the company's technology infrastructure and supplies IT needs to enable OptiGlobe to meet its customers' mission-critical demands. The data centers use HP Netservers and HP OpenView software.
• Telefonica Data, a provider of data transmission, installs network services and system management with HP hardware, software and consulting to offer high-quality service level agreements to customers with monitoring and statistical options. The solution is composed of HP Netservers, HP OpenView software, HP Internet Usage Management software, consulting and support services.
• TESS, one of the largest Brazilian telecommunications operators with over 1 million subscribers, is working with HP to migrate its MCIS system to Exchange 2000. The new solution will be used at TESS Internet Services (TIS). With many customized applications, the migration represents a complex challenge. More than 160,000 users will migrate from MCIS to Microsoft® Exchange Server, a process that has never been executed outside test environments in laboratories. The solution includes hardware, software, integration and consulting services, and support.
• Brazil Telecom installed Latin America's largest supercomputer, based on six HP Superdome servers, to run their customer relationship management, mediation and field force management applications.

Europe and Middle East

• Click Vodafone in Egypt signed a $1.7 million, three-year service agreement to cover hardware, software support, IN7 support and license subscription.
• Vodafone selected HP's TeMIP solution to provide network and services management for its GPRS (general packet radio service) mobile network throughout its territories in Europe, the Middle East and Africa.
• Telecom Egypt chose AlphaServers to run the largest Oracle financials implementation in Egypt, supported by a StorageWorks SAN, and also acquired 750 desktop PCs.
• Deutsche Telecom AG is deploying TeMIP, acquiring licenses, services and AlphaServer systems with an investment of $5.3 million.
• European Telecom Holding AG, an Internet service provider, chose HP to deliver, stage, rollout and support 14,000 clients.
• Saudi Telecom Company selected HP for its TeMIP deployment to manage its data network.
• Portugal Telecom called on HP Services to migrate nearly 11,000 seats from Novell to a Microsoft platform, implemented on 100 HP servers.
• Telia Mobile, of Sweden, tapped HP for their fraud management systems integration.
• T-Mobile, in the Czech Republic, chose HP to implement their CRM management and recharge/payment systems on HP hardware infrastructure.
• Germany's T-Systems Nova awarded HP a $2.9 million contract for TeMIP licensing, consulting and customer support services.

Asia Pacific

• China Telecom is implementing a local network management system upgrade, valued at $10 million, for 11 provincial branches of China Telecom in West China. The solution includes multiple HP servers. HP won this deal over IBM and Sun.
• China Railcom is implementing multiple HP servers and storage technology for a billing system. The deal is valued at $10 million and went to HP over IBM, Sun and EMC.
• GrameenPhone Limited is the largest GSM operator in Bangladesh with almost 60 percent market share. HP is providing multiple servers and storage systems for GrameenPhone Limited's billing and mediation platform, point of sales system and development system.
• Jilin Mobile is implementing an HP solution including HP Surestore Disk Array XP512s, critical systems support, HP Surestore E20/700 and HP Superdome servers. HP was selected for the agreement, valued at $1.9 million, over competition from IBM, EMC and NTTapp.
• PT Satelindo, one of Indonesia's biggest GSM and IDD operators, is standardizing on HP storage solutions in a deal that is valued at $1 million.
• Telkomsel is the largest GSM operator in Indonesia. HP is providing business recovery services valued at $2.5 million and maintenance services for their data warehouse valued at $1.2 million.
• Zheijang Mobile is implementing multiple HP servers for a key support system in a deal valued at $2 million.
• Zheijang Telecom is implementing multiple HP servers and storage systems, valued at $3 million, for call center operations.
• Vodafone Australia/NZ selected HP to outsource desktop PC and server management for approximately 3,200 seats across Australia and New Zealand in a three-year deal worth about $13.5 million.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. The merged company had combined revenue of approximately $81.7 billion in fiscal 2001 and operations in more than 160 countries. Information about HP and its products can be found at http://www.hp.com.

Microsoft is a U.S. registered trademark of Microsoft Corp.

This document contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. Further, these forward-looking statements do not constitute new or amended overall financial guidance for HP, and any anticipated aggregate contract values referred to in this document do not independently provide a basis for determining the future timing of revenue.

All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues (including where the underlying contract has already been signed), or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include performance of contracts by customers and partners; employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 (as filed with the SEC on March 12, 2002) and subsequently filed reports.

HP assumes no obligation and does not intend to update these forward-looking statements.