Contactel Deploys Packet Voice Network Based on Nortel Networks Succession Solution; Plans to Deliver New Hosted Voice, Data, Multimedia Services

Business Wire, April 3, 2003

Business Editors/High-Tech Writers

PRAGUE, Czech Republic--(BUSINESS WIRE)--April 3, 2003

Contactel, a rapidly expanding Czech communication company and leading provider of Internet services to businesses in the Czech Republic, has deployed a Succession solution from Nortel Networks (NYSE:NT) (TSX:NT) to handle increasing network traffic demands, and to build a foundation for future delivery of new, hosted multimedia services.

Contactel has deployed Nortel Networks Succession Communication Server 2000 softswitch and Nortel Networks Passport Packet Voice Gateways (PVG) to deliver full-featured, premium voice and broadband services to its customers on a more cost-effective IP (Internet Protocol) infrastructure.

Having successfully concluded interconnection tests with Cesky Telecom, Contactel has become the first operator in the Czech Republic to run a softswitch in the public telephone network. As part of the interconnection testing, Contactel carried out detailed voice quality testing and determined that Nortel Networks Succession Communication Server 2000 complies with current regulatory requirements for these products in the Czech Republic.

"We have taken the next step in our circuit-to-packet migration strategy," said Peter Rubeck, chief operating officer, Contactel. "By adding a Nortel Networks Succession superclass softswitch, we can easily add new multimedia services that our customers will really value. In addition, we can cost-effectively accommodate the increasing traffic demands of our current voice and data services."

A superclass softswitch meets all the criteria for true service provider circuit-to-packet migration, including: local, tandem and long distance capability on a single platform; full business and residential telephony service sets; regulatory features like Lawful Intercept and Number Portability; and carrier-grade reliability and scalability. Nortel Networks is the only vendor delivering a superclass softswitch today.

"We are proud of our work with Contactel in one of the fastest-growing markets in Europe," said Peter Newcombe, president, Optical Networks and Wireline Networks for Nortel Networks in Europe, the Middle East and Africa. "The challenge for service providers in delivering innovative new services is to find a cost-effective way to introduce them into an existing business model. By providing a practical circuit-to-packet evolution plan, Nortel Networks has positioned Contactel to fully leverage its existing network assets while laying the foundation for new, revenue-generating, IP-based services."

In February 2003, Nortel Networks announced its comprehensive Succession Services initiative designed specifically to help wireline and wireless service providers generate new service revenue and to facilitate the mass market deployment of new, hosted multimedia and packet voice services that businesses and consumers will value.

Nortel Networks has a comprehensive voice over IP portfolio -- including superclass softswitches and packet gateways -- to enable delivery of solutions across all four carrier voice over IP market applications: cable, local, long distance and wireless. Nortel Networks was the #1 vendor in voice over packet equipment in 2002, according to Synergy Research Group.

Contactel was established in 1999 as a joint venture of CESKE RADIOKOMUNIKACE, a.s. and Tele Danmark A/S. The objective of Contactel is to become a high quality, preferred telecommunications operator. Contactel offers a full portfolio of Internet, data, and voice services while extending its offer with the ongoing liberalization. Contactel has been a member of the prestigious association European Foundation for Quality Management since June 2000. The quality of Contactel's activities is internationally certified by ISO 9001:2000 as of October 2001.

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 Wireless Networks, Wireline Networks, Enterprise Networks and Optical 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 customer financing and commitments; stock market volatility; the entrance into an increased number of supply and outsourcing contracts which contain delivery and installation 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.