Nortel Networks Completes One of World's Longest Optical Networks for China Telecom

Business Wire, Jan 23, 2002

Business Editors/High-Tech Writers

BEIJING--(BUSINESS WIRE)--Jan. 23, 2002

China Telecom, the largest carrier in China, and Nortel Networks (NYSE:NT) (TSE:NT.) today announced the official opening and commercial operation of China Telecom's national high-speed transmission network, based on Nortel Networks optical networking equipment.

The 15,000-kilometer network is believed to be one of the world's longest. Its spans 18 of China's total 31 provinces and covers most of the country's developed areas. The network is the most significant project China Telecom has built in recent years. It provides China Telecom with the massive bandwidth and levels of network intelligence that it needs, as well as enabling China Telecom to drive to industry's lowest cost per connected bit.

In an international public tender announced in February 2001, China Telecom awarded Nortel Networks a contract estimated at approximately US$101 million to deploy this key project. By cooperating closely, the companies were able to install, develop, test and certify the network within one year.

"The opening of China Telecom's national optical backbone network underscores the success of our ongoing undertaking -- building top-class optical long haul networks in China," said Masood Tariq, president, Nortel Networks Asia Pacific. "Nortel Networks is striving to cooperate with China Telecom and other Chinese customers to deploy industry leading solutions, and to keep pace with the rapid development of China's information industry."

Nortel Networks solution for China Telecom includes Nortel Networks OPTera Long Haul 1600 Optical Line System and OPTera Connect DX optical switch.

Operating on a 10 gigabits per second platform, OPTera Long Haul 1600 uses DWDM to split light into as many as 160 channels to maximize capacity on each fiber. This enables up to 28 million simultaneous Internet connections on a single strand of fiber, and increases by 640 times the Internet's backbone speed and capacity to carry data, video and voice services.

OPTera Connect DX optical switch enables service providers and carriers to increase network capacity, provide flexible services, improve connection and network management capabilities, and enhance network reliability. Enabling quick, seamless delivery of global transport and end-to-end services solutions, OPTera Connect DX supports DWDM applications capable of deploying 1,600 gigabits of bandwidth over a single, bi-directional optical fiber.

To date, Nortel Networks has won more than 30 contracts in China for 10 gigabit and DWDM optical solutions that span more than 40,000 kilometers.

China Telecom is the country's largest telecommunications operator with businesses covering fixed lines and various value-added Internet services. China Telecom has been seeing a rapid growth in the country's promising telecommunications market. By the end of the year 2001, its subscribers totaled 170 million, 99 percent of China's total.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro Networks, Wireless Networks and Optical Long Haul Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the web at www.nortelnetworks.com.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price and product competition; the dependence on new product development; the impact of rapid technological and market change; the ability of Nortel Networks to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of consolidations in the telecommunications industry, the uncertainties of the Internet; stock market volatility; the ability of Nortel Networks to recruit and retain qualified employees; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; and the impact of increased provision of customer financing by Nortel Networks. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.