Nortel

Nortel

March 16, 2005 13:07 ET

City of San Jose Selects Nortel to Provide Network for New City Hall; Benefits to Include Greater Collaboration, Improved Access to Services


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: NORTEL

NYSE, TSX SYMBOL: NT

MARCH 16, 2005 - 13:07 ET

City of San Jose Selects Nortel to Provide Network for
New City Hall; Benefits to Include Greater
Collaboration, Improved Access to Services

SAN JOSE, Calif.--(CCNMatthews - Mar 16, 2005) -

The City of San Jose has selected Nortel(NYSE:NT)(TSX:NT) to provide a
converged communications network for the new San Jose City Hall that
will help city officials collaborate more easily and serve constituents
more effectively.

An agreement was signed today following yesterday's unanimous approval
by the San Jose City Council of a recommendation to accept Nortel's bid.
The recommendation was based on Nortel's ability to deliver the
best-performing, most cost-effective state-of-the-art communications
solution.

Under the agreement, Nortel is expected to complete network installation
no later than June 9, 2005 and to provide related network operations
services for at least one year.

"Communications enhance the human experience by providing the glue that
bonds citizens with the officials that serve them," said Malcolm
Collins, president, Enterprise Networks, Nortel. "Being chosen to
provide these capabilities to the City of San Jose shows the unyielding
commitment of the city government to provide their constituents with the
best interactive communications."

"It also protects their tax dollars wisely with a solution that provides
significant savings and offers the best total cost of ownership model,"
Collins said. "We appreciate being selected to team with the City of San
Jose to bring these capabilities to the capital of Silicon Valley, which
is also the home of our networking research and development facilities."

The Nortel solution for the new San Jose City Hall will offer powerful
collaboration tools based on feature-rich voice, data, video, wireless
and IP (Internet Protocol) multimedia capabilities. This will allow
officials who are traveling, telecommuting or separated by distance to
communicate as effectively as if they were in the office. They will be
able to use tools like video conferencing, document and Web-session
sharing, and white board collaboration regardless of location. Also
included will be a 'state-of-the-art' call center with voice recognition
capabilities that will provide residents with a simpler way to access
city government services.

Nortel's converged network solution for the new San Jose City Hall will
be designed to provide carrier-grade reliability and the most powerful
security capabilities available. Based on Nortel's heritage of serving
telephone companies, this network will provide industry-leading
'uptime'. Nortel has backed up this claim by entering into service level
agreements with the City of San Jose.

Nortel is a leading provider of government solutions worldwide with the
broadest portfolio in the industry, leveraging expertise in new
technologies like IP telephony, virtual private networks, Optical
Ethernet, advanced multiservice switching and wireless local area
networks.

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; 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.

Nortel, the Nortel logo and the Globemark are trademarks of Nortel
Networks.

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