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Nortel

September 14, 2005 22:00 ET

China Mobile Xinjiang Chooses Nortel for Multi-Vendor Wireless Network Optimization

BEIJING--(CCNMatthews - Sep 14, 2005) -

Service Provides On-Going Network Efficiency; Helps Reduce Costs, Improve Network Quality, Performance

China Mobile, one of the largest GSM wireless carriers in the world, has awarded a one-year network optimization contract to Nortel (NYSE:NT)(TSE:NT) for its largest regional operator, Xinjiang Mobile.

Under terms of the agreement, Nortel is providing continuous performance assessment to help improve quality and reduce costs for the multi-vendor GSM/GPRS network in the Yili and Bazhou prefectures of China's vast northwestern Xinjiang Region.

Covering more than 1.6 million square kilometers and accounting for one-sixth of China's total area, Xinjiang Mobile's geographic coverage area is the largest of any GSM/GPRS network in the China Mobile family of provincial and regional operators.

Building on a network optimization project completed earlier in 2005, the new project has been expanded to include the entire multi-vendor environment. The optimization service includes network planning, performance monitoring, technical support, and on-site training and certification of Xinjiang Mobile personnel.

"Ensuring our Xinjiang switching and network infrastructure continuously performs at peak levels is vital to delivering high quality services to our subscribers," said Bai Zhigang, general manager, Xinjiang Mobile. "As a world leader in GSM technology, Nortel provides a suite of services that not only supports the activities of our own on-site network operations personnel, but also allows us to maintain and improve service levels while reducing costs."

"Network quality and reliability are vital factors in providing 'anytime, anywhere' availability of advanced mobile services," said Henry So, vice president, China, Nortel. "This network optimization project will help Xinjiang Mobile to enhance network performance and to address the rapidly evolving requirements of GSM/GPRS subscribers in this important market."

"Nortel's selection as preferred supplier for optimization of this multi-vendor network reflects confidence in our broad experience in network optimization, and in our ability to meet the most stringent customer demands for achieving optimal network performance," So said.

A key component of the comprehensive Nortel Global Services portfolio (www.nortel.com/globalservices), Wireless RF (Radio Frequency) Optimization Services are designed to help customers realize the full value of their networks by streamlining network performance, improving network coverage, increasing subscriber service quality, and improving time-to-market for new subscriber services. Nortel Wireless RF Optimization Services include network analysis, assessment and recommendation for optimal network capacity and coverage. These services contribute to a more rapid return on investment by lowering overhead and operating expenses, resolving network capacity inefficiencies, and helping diminish the need for new hardware.

Since 2001, Nortel has implemented five expansions to Xinjiang Mobile's GSM 900 digital cellular network, increasing subscriber capacity by 600,000 to more than one million. Nortel has also provided Xinjiang Mobile with software upgrades to support Advanced Intelligent Network functionality and to increase subscriber capacity.

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 www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

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; any undetected product defects, errors or failures; 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.

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