July 27, 2005 20:01 ET

Australian Taxation Office Upgrades 25,000 Users to Multimedia Conferencing with Nortel; Nortel Solution Expected to Deliver Return on Investment in Nine Months

SYDNEY, Australia--(CCNMatthews - Jul 27, 2005) -

The Australian Taxation Office (ATO) has rolled out a round-the-clock multimedia conferencing solution from Telstra Business Services (TBS), a Nortel (NYSE:NT)(TSX:NT) reseller, to support 25,000 users nationwide.

The new conferencing capabilities, based on the Nortel Multimedia Communication Server (MCS) 5100, are expected to pay back in nine months what they cost to implement by eliminating rental fees for ATO's monthly teleconferences.

ATO is the Federal Government of Australia's main revenue collection agency. Its primary function is to manage and shape the revenue systems that sustain social and economic policy and fund services for Australian citizens.

As an organisation dispersed throughout Australia, ATO makes regular use of teleconferencing facilities, and has re-evaluated its service solution to ensure it has in place an efficient and cost-effective system that provides teleconferencing functionality for its users.

"Through TBS, we had in place a hosted teleconferencing service that gave us adequate functionality, but we wanted to enhance its features, such as 24X7 access to audio conferencing facilities," said Colin McLean, assistant commissioner at the Tax Office. "The Nortel solution gives individual users round-the-clock access to personalised multimedia conferencing, and gives us a system that, at the end of the current facilities management contract, we tangibly own as an asset as opposed to something we rent."

Following a market survey, TBS recommended Nortel's MCS 5100 as the platform of choice for providing this service. Desktop integration provides feedback to the chairperson on when each participant joins and leaves the call and the number that they are calling from. The system also integrates with the Microsoft* Outlook* contacts list, allowing for 'click-to-call' capability. With the MCS Personal Agent, users have the ability for a user to direct calls to multiple numbers simultaneously.

"We are looking for ways to save on travel costs through collaborative computing, and the Nortel solution is one way we'll be doing that," McLean said. "The MCS 5100 addresses our teleconferencing requirements and introduces a range of collaborative computing applications that will drive our communications as a virtual enterprise of connected users."

Nortel's MCS 5100 is independent of ATO's PABX platform, and it integrates with any existing analogue, digital, or IP-based system (ATO supports a dual-vendor strategy that includes a Nortel PABX). It also employs encryption to ensure that voice, video and data communications are fully secure from end-to-end, even over wireless networks.

"The Nortel MCS 5100 has created a unique collaboration environment for ATO with its refined set of converged voice, video and data applications," said Mark Stevens, president, Australia and New Zealand, Nortel. "It is an environment that engages the human experience of business communications by encouraging collaboration between users irrespective of their location or the device they're using to communicate, and integrates intuitively with the tools that Tax Office users are already accustomed to using for audio and video conferencing."

Nortel installed the MCS 5100 and trained TBS support staff and ATO end-users. The system has been available to employees since early July 2005.

The Nortel MCS 5100 delivers voice, call management, desktop video calling, collaboration tools and personalization services to a distributed workforce. It offers enhanced video capabilities with multi-point video conferencing, Instant Messaging capabilities and Web application collaboration that allow applications and documents to be shared in real time.

With more than 50 million Ethernet ports and 50 million voice lines sold to enterprises and government agencies, Nortel is uniquely positioned to help enterprises increase their effectiveness by transitioning to IP communications.

About Nortel

Nortel is a recognised leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at For the latest Nortel news, visit

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 outcome of regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity, and any related potential dilution of Nortel's common shares; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal control over financial reporting and the conclusion of Nortel's management and independent auditor that Nortel's internal control over financial reporting is ineffective, which could continue to impact Nortel's ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (SEC); ongoing SEC reviews, which may result in changes to Nortel's and NNL's public filings; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004 and December 14, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions;

cautious or reduced spending by Nortel's customers; increased consolidation among Nortel's customers and the loss of customers in certain markets; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's ability to 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; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization and consolidation in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel's customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date of Nortel's forward purchase contracts; negative developments associated with Nortel's supply contracts and contract manufacturing agreements, including as a result of using a sole supplier for a key component of certain optical networks solutions; the impact of Nortel's supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; and the future success of Nortel's strategic alliances.

For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel 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.

Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks. Microsoft and Outlook are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

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