Nortel Introduces New VoIP Technology for Small, Medium Service Providers


IMS-Ready Softswitch Improves Communications with Complete Set of VoIP Features and Services

TORONTO, June 5 / / -- Nortel(x) (NYSE/TSX: NT) has announced the Nortel Communication Server 1500 (CS 1500), a second generation VoIP softswitch that provides a powerful platform for IP communication services. The CS 1500 will allow small and medium-sized wireline service providers to meet growing subscriber demand for both local and long-distance voice and next generation services. It also positions 'greenfield' service providers to offer advanced services and lays the foundation for future IMS-based multimedia services offering unprecedented levels of personalization, security and mobility.

Nortel has also introduced new Global Services to help small and medium- sized service providers deploy new IP-based services more quickly and optimize network efficiency and security.

"We are frequently looking for technology that allows us to leverage our existing investments and infrastructure to deliver a highly-reliable telephone service to our customers and also seamlessly introduce new IP-based services as they become available," said Jake Casey, executive vice president of Citizens Communications, a full-service communications provider offering telephone, television and Internet products and services in rural areas and small and medium-sized towns and cities around the United States. "Nortel's CS 1500 will help us satisfy our customers' communications needs today and expand our network to support more advanced services in the future."

"Nortel's CS 1500 softswitch will provide a low-cost, highly-reliable solution for small and medium-sized service providers to simply and easily support the traditional voice services needed today while laying the foundation for future IP-based services of tomorrow," said Alan Stoddard, general manager, Carrier Multimedia Networks, Nortel. "Nortel is leveraging its VoIP leadership to help service providers seamlessly evolve their networks to a new cost-effective packet infrastructure capable of delivering the advanced communications services subscribers are demanding."

The CS 1500 is scheduled for field trials starting fourth quarter 2006 and general availability in selected global markets during the first quarter of 2007. Nortel will showcase the CS 1500 at GLOBALCOMM 2006 (booth No. 41018) June 5-7 in Chicago.

"VoIP is an expected and virtually required progression of all communication networks, and the focus is on not only how to make it fit within an evolving network and service environment, but also how to make it profitable," said Bettina Tratz-Ryan, research director, Gartner. "To this end, service providers are turning to softswitch architecture to migrate their networks to IP and deliver scalable, multimedia services to end users that generate new revenues from day one."

Building on Nortel's leadership position in SIP and VoIP, CS 1500 provides a platform for advanced SIP based services and a cost-effective evolution path for DMS-10 and DMS-100 customers.

The CS 1500 core control, gateways and operations, administration and maintenance interfaces are all housed in a single chassis solution. Service providers can deploy the switch for end-office (Class 5) and Access Tandem (Class 4) applications to replace an existing switch or as an addition to the network. It offers the full range of legacy network interfaces and regulatory requirements, including E-911 and CALEA.

The product is complemented by a suite of Nortel Global Services for CS 1500 to support the entire network lifecycle, including engineering and installation, security assessment, integration and acceptance, assisted on- site or remote network operations, and on-going maintenance.

Nortel's VoIP and IMS infrastructure solutions are designed to support simple modular upgrades, allowing existing hardware and software to be reused. Nortel's infrastructure solutions feature one of the most open implementations in the market as evidenced by the collaboration with many developers, partners and applications providers through the Nortel Developer Program. Nortel has more than 300 carrier VoIP networks installed around the world.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people with information. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit nortel.com/news.

Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "plans", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Nortel's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different. Although Nortel believes expectations reflected in such forward-looking statements are reasonable based upon certain assumptions, they may prove to be inaccurate and consequently Nortel's actual results or events could differ materially from its expectations set out in this press release. Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following (i) risks and uncertainties relating to Nortel's restatements and related matters including: Nortel's most recent restatement and two previous restatements of its financial statements and related events; the negative impact on Nortel and NNL of their most recent restatement and delay in filing their financial statements and related periodic reports (including the anticipated delay in filing the Quarterly Reports on Form 10-Q for the first quarter of 2006) causing them to breach their public debt indentures and, if the delay extends beyond June 15, 2006, their obligations under their credit facilities, with the possibility that the holders of their public debt or NNL's lenders would seek to accelerate the maturity of that debt, and causing, if the delay extends beyond June 15, 2006, a breach of NNL's support facility with EDC with the possibility that EDC would refuse to issue additional support under the facility, terminate its commitments under the facility or require NNL to cash collateralize all existing support; legal judgments, fines, penalties or settlements, or any substantial regulatory fines or other penalties or sanctions, related to the ongoing regulatory and criminal investigations of Nortel in the U.S. and Canada; any significant pending civil litigation actions not encompassed by Nortel's proposed class action settlement; any substantial cash payment and/or significant dilution of Nortel's existing equity positions resulting from the finalization and approval of its proposed class action settlement, or if such proposed class action settlement is not finalized, any larger settlements or awards of damages in respect of such class actions; any unsuccessful remediation of Nortel's material weaknesses in internal control over financial reporting resulting in an inability to report Nortel's results of operations and financial condition accurately and in a timely manner; the time required to implement Nortel's remedial measures; Nortel's inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC), and Nortel's below investment grade credit rating and any further adverse effect on its credit rating due to Nortel's restatement of its financial statements; any adverse affect on Nortel's business and market price of its publicly traded securities arising from continuing negative publicity related to Nortel's restatements; Nortel's potential inability to attract or retain the personnel necessary to achieve its business objectives; any breach by Nortel of the continued listing requirements of the NYSE or TSX causing the NYSE and/or the TSX to commence suspension or delisting procedures; any default in Nortel's filing obligations extending beyond July 15, 2006 for the 2006 First Quarter Form 10-Qs, causing any Canadian securities regulatory authority to impose an order to cease all trading in Nortel's securities within the applicable jurisdiction or to impose such an order sooner if Nortel fails to comply with the alternate information guidelines of such regulatory authorities; (ii) risks and uncertainties relating to Nortel's business including: yearly and quarterly fluctuations of Nortel's operating results; reduced demand and pricing pressures for its products due t

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