China Unicom Selects Nortel Networks to Deploy Metro Optical Networks in Guangdong; OPTera Metro Platform Expected to `Break' Bandwidth Bottleneck in Seven Key Cities

Business Wire, June 26, 2002

Business Editors & High-Tech Writers

China Unicom has selected Nortel Networks (NYSE:NT)(TSX:NT.) to deploy an optical solution based on Nortel Networks OPTera Metro Multiservice Platform in seven key cities in Guangdong Province - Guangzhou, Shenzhen, Dongguan, Foshan, Shunde, Huizhou and Zhongshan.

The US$15 million contract further enhances Nortel Networks leadership position in building high-performance metro optical networks in China. These networks will carry voice, data, video and Internet services to support China Unicom's GSM and CDMA wireless services, and long-distance services.

"We're working to help China Unicom reduce the metro bandwidth 'bottleneck' in Guangdong Province," said Robert Mao, president and chief executive officer, Nortel Networks China. "Our industry leading OPTera Metro solutions will help position China Unicom to create rich revenue-generating services, and to better satisfy current and future customer demands."

Under the contract, Nortel Networks solution for China Unicom will include deployment of Nortel Networks OPTera Connect DX optical switch and OPTera Metro 4000 in some of Guangdong's major cities, and OPTera Metro 2000 in some of the smaller metro environments.

Nortel Networks OPTera Metro portfolio harnesses the power of DWDM, SONET/SDH, and Optical Ethernet to extend the value of optical networks. OPTera Metro enables core and access network infrastructures for current and future services, helping service providers to deliver 'on-demand' capacity, service differentiation, timely provisioning, and streamlined network operations.

OPTera Connect DX positions service providers and carriers to dramatically increase network capacity, provide flexible services, improve connection and network management capabilities, and significantly enhance network reliability. OPTera Connect DX is the only regional cross-connect that integrates the metro network with the long haul backbone. It is the most widely used 10 gigabits-per-second (Gbps) optical switch in the world, with more than 5,000 deployed for 100 customers.

Nortel Networks and China Unicom have a strong history of working together. In 2000, China Unicom chose Nortel Networks to deploy a 1,000-kilometer, 10 Gbps backbone network to serve the densely populated Pearl River Delta. In 2001, China Unicom selected Nortel Networks high-performance Optical Ethernet solution to enable simple, fast and reliable delivery of high bandwidth services in Dongguan, Foshan, Shunde, Jiangmen, Zhuhai, Shantou, Zhongshan and Huizhou. Also in 2001, Nortel Networks announced GSM and CDMA contracts with China Unicom estimated at approximately US$608 million.

Nortel Networks ranked #1 in the global metro DWDM market in the first quarter of 2002, according to the Dell'Oro Group and RHK. In 2001, Nortel Networks ranked #1 in China's optical long haul market, according to RHK.

Nortel Networks metro optical services are deployed in more than 1,000 customer networks in 45 countries and can be found in 18 of the top metropolitan service areas around the world. In China, Nortel Networks is actively working with domestic carriers to promote deployment of high-performance metro optical networks.

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 and Enterprise 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 severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to meet financial covenants contained in our credit agreements; the ability to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. 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. Unless otherwise required by applicable securities laws, 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.