March 16, 2005 04:00 ET

China Ministry of Railways Selects Nortel to Provide GSM-R Network for Qinghai-Tibet Railway; Follows Pioneering, Year-Long Trial on the World's Highest Rail Line




MARCH 16, 2005 - 04:00 ET

China Ministry of Railways Selects Nortel to Provide
GSM-R Network for Qinghai-Tibet Railway; Follows
Pioneering, Year-Long Trial on the World's Highest
Rail Line

BEIJING--(CCNMatthews - Mar 16, 2005) -

China's Ministry of Railways has selected Nortel (NYSE: NT) (TSX: NT) to
provide a digital wireless communications network for the world's
highest altitude rail service - the Qinghai-Tibet Railway.

This will be the first commercial use of GSM for Railways (GSM-R)
technology in China, following a pioneering, year-long trial of Nortel's
technology over more than 186 kilometers of track built on perennially
frozen land at altitudes up to 4,780 meters above sea level.

The 1,142-kilometer Qinghai-Tibet Railway will be the first in China
supported solely by GSM-R communications with no traditional analog
system available for back-up. It will also be the first railway in China
to use GSM-R to transmit safety data for train control and the first to
adopt double coverage solutions to enhance system safety, reliability
and availability. In addition, it will be the first GSM-R infrastructure
in China to incorporate GPRS (General Packet Radio Service) for data

"The trial conducted by Nortel successfully passed all required tests
meeting our strict standards. It demonstrates Nortel's breadth of
expertise and experience in GSM-R technology and ability to work with
difficult conditions and terrain," said Shu Kai Hu, vice chief
executive, National Quinghai-Tibet Railway Construction Administration
Office. "This new wireless network represents the most up-to-date
communications technology available to the railway industry worldwide
and we are pleased to move beyond the trial to now fully implement the
Nortel GSM-R solution"

In 2004, Nortel began the GSM-R digital wireless communications network
trial for the Ministry of Railways creating the first test track in Asia
supported solely by GSM-R. During the trial, Nortel successfully
demonstrated the ability to develop system test plans, conduct GSM-R
integration, and perform network optimization and troubleshooting
adapted to the challenging environmental conditions along the
Qinghai-Tibet Railway.

"Nortel has delivered the world's leading railway communications
technology to China," said Robert Mao, president and chief executive
officer, Greater China, Nortel. "Our noteworthy completion of a
demanding field trial under challenging conditions serves as testament
to Nortel's strong commitment to customers and to the quality and
contribution of Nortel's research and development team in China. To the
delight of the Ministry of Railways, the Quality of Service (QoS) of our
GSM-R technology exceeded ETCS (European Train Control System) Level 2
specifications and requirements. As a landmark project for China to
develop its western region, Nortel is pleased to provide the
communications system that will help ignite and power the region's
economic growth."

GSM-R is proven as the industry's most complete and cost-effective
solution for wireless railway communications and is currently being
implemented in 15 countries worldwide. Offering a secure platform, GSM-R
provides voice and data communications between the operational staff of
a railway organization, including drivers, dispatchers, shunting team
members, train engineers and station controllers.

Nortel's telecommunications networking experience, complemented by
specialized implementation services designed specifically for the
railway industry, provides an end-to-end GSM-R network solution that is
also scalable to support GPRS and high-speed data and voice. The Nortel
GSM-R solution provides a number of advantages, including a
railway-customized GSM-R Base Transceiver Station for better trackside
coverage under severe environmental conditions. Nortel's GSM-R
infrastructure enhances QoS and reliability, and provides clear voice
and data communications for conventional and high-speed trains.

Nortel is the world leader in GSM-R technology with more than 10 years
of experience and more than a 60 percent share of railway line
kilometers deployed to date. Nortel has been selected to deploy GSM-R
networks in nine countries, including national deployments for the three
largest railway operators in Europe.

Nortel deployments include nationwide GSM-R networks for RFF in France,
Network Rail in Great Britain and Deutsche Bahn in Germany. Nortel has
deployed GSM-R networks for railway lines between Bilbao and Santander
for Spain's Renfe (Entidad Publica Empresarial Red Nacional de los
Ferrocarriles Espanoles), for Eastern Railway in India, for Cesky drahy
(CD) in the Czech Republic, and for Slovak Railways in Slovakia. Nortel
has also deployed dedicated, end-to-end high-speed line systems for
Deutsche Bahn's ICE between Frankfurt and Cologne, and for SIRTI in
Italy between Rome and Naples.

Nortel has been a pioneer in the GSM-R standards process since 1992, and
works with Union Internationale des Chemins de Fer (UIC) and ETSI
European Telecommunications Standards Institute (ETSI) on standards
improvements. Nortel supplied equipment for the Mobile Radio for
Railways Networks in Europe (MORANE) trial and was a major contributor
to the European Integrated Railway Radio Enhanced Network (EIRENE) GSM-R

About Nortel

Nortel is a recognized 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; 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 controls over
financial reporting; the impact of Nortel's and NNL's failure to timely
file their financial statements and related periodic reports, including
breach of its support facility and public debt obligations and 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 our public filings; the
potential delisting or suspension of Nortel's and NNL's publicly traded
securities; 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,
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;
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 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 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 or early settlement, which is currently not available,
of Nortel's forward purchase contracts; 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.

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