Nortel
TSX : NT
OTC Bulletin Board : NRTLQ

Nortel

June 23, 2009 06:00 ET

Nortel Holds 41 Percent Share of 40G Market Expected to Hit US$1.2 Billion by 2013

Nortel's 40G Leadership Translates to New Customers, New Revenues

TORONTO, ONTARIO--(Marketwire - June 23, 2009) - New industry analysis shows that the market for high-bandwidth 40G optical solutions continues to escalate, and that Nortel(1) (TSX:NT)(OTCBB:NRTLQ) is the clear leader in this high-growth segment with a 41 percent share of the market. The new report from industry analyst firm Dell'Oro Group(2) predicts 40G solutions will soon comprise US$1.2 billion in revenue worldwide.

"While the overall worldwide optical market declined 20 percent sequentially and 11 percent year-over-year mainly due to the effects of the global economy, the 40G market has shown continued growth and strength with a 1Q09 increase of 8 percent sequentially and 400 percent year-over-year," said Jimmy Yu, optical market analyst, Dell'Oro. "We expect 40 Gbps revenue to grow at a 35 percent compound annual growth rate to a market size of $1.2 billion in revenue by 2013."

Since the first availability of Nortel's 40G/100G Adaptive Optical Engine in the second quarter of 2008, Nortel has rapidly risen to be the clear leader in 40G wavelength shipments according to the latest Dell'Oro report. Dell'Oro also shows that Nortel's share of the 40G market has steadily increased from 31 percent in 2Q08 to 41 percent in 1Q09.

Already, 46 service providers around the world have signed on to deploy Nortel's 40G solution, with about one third of those providers being new Nortel optical customer opportunities. In all, over 1,500 Nortel 40G ports have been shipped to date. Nortel is also a leader in the development of 100G solutions, with seven successful 100G field trials already announced, and availability of the Nortel 100G solution planned for later this year.

While some optical equipment vendors have essentially skipped development of 40G solutions to push their 100G vision, Nortel provides a clear evolution path for service providers from 10G to 40G and on to 100G.

"As the rest of the industry continues to race to develop a viable 100G solution, Nortel is able to leverage technology from our commercially available 40G solution that is easily deployed today and can be seamlessly upgraded to 100G without a major network reinvestment," said Philippe Morin, president, Metro Ethernet Networks, Nortel. "The rapid adoption of our 40G solution is not only driving new revenues, but also giving us a jump start on 100G leadership and adding to our loyal customer installed-base."

Nortel will showcase its 40G/100G solution this week at the WDM and Next-Gen Optical Conference in Nice, France, the first public demonstration of 100G in Europe. At the event's 100G Showcase session,(2) Nortel will share key results and findings from several of its 100G customer field trials.

The broad acceptance and growth of Nortel's 40G solution is due primarily to its unique ability to transport a 40G wavelength with the same reach and ROADM tolerance of 10G systems, as well as the ability to travel across all types of optical fiber, including low-quality fiber that even today's 10G solutions can't traverse. This is achieved through coherent technology, DP QPSK modulation, and advanced electronic digital signal processing techniques, which Nortel is the first and only vendor to successfully implement (see the Nortel whitepaper on 40G technologies for more detail).

About Nortel

Nortel delivers 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. 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.

(1)Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

(2)This is a 3rd party link as described in our Web linking practices.

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