Silk telecom, Nortel Build Revolutionary Metro Ethernet Network in Australia

Silk telecom will deliver carrier-grade security, resilience and quality to its business and government customers at cost-effective Ethernet prices with Australia's first Metro Ethernet network based on Nortel(1) (TSX: NT)(NYSE: NT) technology.

The Silk network, valued in excess of US$1million, will feature Nortel's breakthrough Provider Backbone Bridging (PBB) and Provider Backbone Transport (PBT) technology, which uses industry standard Ethernet to drive a radical change in the economics of carrier networks. PBT makes it simple for service providers like Silk to use Ethernet - a transmission technology originally used to connect PCs in local area networks - as the fundamental carrier-grade transport technology. This allows Silk to deliver high-bandwidth services such as mission-critical business applications and full-streaming video at new levels of quality, savings and operational simplicity.

"Last year we built a new DWDM optical backbone network using Nortel's innovative Common Photonic Layer (CPL) technology to support a wide range of high-speed managed services for customers in both metro and rural areas," said Simon Perkins, chief executive officer, Silk telecom. "Nortel's PBB/PBT enabled Metro Ethernet solution works seamlessly with our CPL backbone providing a fully integrated solution at a reduced level of cost and complexity when compared to other technologies. As a result, we are able to differentiate ourselves in the marketplace by providing more cost-effective services to our customers."

"Previously, service providers had no choice but to use complex and costly transport technology to be able to offer high-bandwidth services to their customers," said Mark Stevens, managing director, Australia and New Zealand, Nortel. "The Metro Ethernet solution Nortel is providing Silk addresses these challenges and delivers on Nortel's promise of Business Made Simple. BT's decision to deploy PBT in its 21st Century Network demonstrates that other service providers are following our lead by moving to Ethernet for their metro networks."

Nortel's Metro Ethernet Networks solution for Silk includes high-performance Metro Ethernet Routing Switch 8600s at the network core and aggregation layers, Metro Ethernet Services Unit 1850s at the access layer, with PBB/PBT technologies enabled for carrier-grade point-to-point and point-to-multipoint Ethernet transport. Nortel's PBB/PBT technologies are designed to enable Silk to offer improved performance to its customers such as reserved bandwidth and 50ms switchover - matching benchmarks set by circuit-based networks - and enhanced Quality of Service (QoS) monitoring through detailed network service and performance metrics via a Web-based information portal.

As the first vendor to support PBB/PBT technology, Nortel is transforming Ethernet into a true carrier-class technology that is simpler to deploy and supports a richer set of business connectivity and triple/quadruple play services, wireless aggregation and backhaul applications.

In addition to BT in the UK, Dakota Carrier Network and Frontier Communications in North America are deploying PBT-based carrier Ethernet solutions. Shanghai Telecom in China, Virgin Media (formerly ntl Telewest ) in the UK and Sonofon in Denmark have also chosen Nortel's Metro Ethernet Networks solutions.

About Silk telecom

Silk telecom is owned by the global Cheung Kong Group and originates from the combination of the telecom interests of three Australian electricity distribution companies: Powercor Australia, CitiPower and ETSA Utilities. The company operates extensive optical telecommunications networks in Melbourne, Adelaide, Perth, and key regional centers in South Australia and Victoria. It also has an established network presence in other major Australian cities.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. For more information, visit Nortel on the Web at www.nortel.com . For the latest Nortel news, visit www.nortel.com/news .

Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "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 from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.