Nortel
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Nortel

March 28, 2007 08:01 ET

LG-Nortel Innovations Power SK Telecom Next-Generation Wireless Services

Advanced Optical and Wireless Backhaul Technologies Increase Network Capacity and Decrease Operator Costs

SEOUL, KOREA--(CCNMatthews - March 28, 2007) - LG-Nortel - the LG Electronics and Nortel(1) (TSX:NT)(NYSE:NT) joint venture - is helping SK Telecom deliver new wireless services such as wireless Internet, 3D gaming, digital home services and telematics. The LG-Nortel solution handles increased volumes of high-speed wireless traffic while significantly improving network cost-effectiveness, scalability and reliability. The solution supports wireless backhaul - the communications traffic between the cell towers and the network.

The new, high-performance Metro Ethernet wireless backhaul infrastructure is already in service, and will support the optimization of over 7,000 wireless base stations nationwide, once fully deployed. The rollout enhances SK Telecom's position as Korea's largest wireless communications operator as the take up of new next-generation wireless services takes off throughout Korea.

According to SK Telecom, by upgrading the existing wireless backhaul network to this next-generation Metro Ethernet solution, the company can easily and cost-effectively deliver high-speed wireless broadband services and reduce current and future wireless backhaul expenses by up to 40 percent. SK Telecom chose LG-Nortel for this large-scale investment in the future because of the company's leadership in delivering both wireless and optical solutions. SK Telecom's satisfaction with the 10G optical backbone from Nortel that has carried its advanced multimedia services for the past several years was also a key factor in that decision.

The new infrastructure supports SK Telecom's existing 2G, 3G and next-generation wireless services, including current wireless multimedia offerings like multimedia messaging, satellite DMB (digital multimedia broadcasting) and WiBro.

"SK Telecom's enhanced wireless capabilities lay the foundation for their customers to enjoy next-generation services, such as mobile video and streaming media. LG-Nortel's wireless backhaul solution builds on Nortel's experience and reputation, gained through meeting the needs of over 40 of the world's largest mobile operators in recent years," said Peter MacKinnon, chairman, LG-Nortel. "Leveraging both this global expertise and our ability to provide solutions that are flexible, cost-efficient and scalable is critical to LG-Nortel's increasingly important role in the rapidly evolving next-generation wireless communications environment."

The components of the LG-Nortel Metro Ethernet backhaul solution for SK Telecom are the Nortel Optical Multiservice Edge (OME) 6110 and 6130 multiservice access products as well as the OME 6500 next-generation multiservice convergence platform - both part of Nortel's IP/Ethernet-centric Metro Ethernet Networks Mobile Backhaul Solutions portfolio. The small and compact OME 6110/6130 devices are used to provide the cell site concentration before the wireless traffic is transported over SONET/SDH, CWDM or Ethernet to the OME 6500 for aggregation and grooming into an efficient and scalable core.

About LG-Nortel

LG-Nortel is a joint venture of LG Electronics and Nortel. Established in 2005, LG-Nortel provides leading edge telecommunications equipment and network solutions, spanning wired and wireless technologies, to service provider and enterprise customers in Korea and around the world. LG-Nortel is also actively developing next generation solutions for global markets, with over 1,000 skilled R&D engineers currently focused on wireless broadband technology evolution and the development of powerful new product lines. For more information on LG-Nortel, visit www.lg-nortel.com.

About Nortel

Nortel is a recognized leader in delivering 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. Nortel does business in more than 150 countries around the world. 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. Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following
(i) risks and uncertainties relating to Nortel's restatements and related matters including: Nortel's most recent restatement and two previous restatements of its financial statements and related events; the negative impact on Nortel and NNL of their most recent restatement and delay in filing their financial statements and related periodic reports; legal judgments, fines, penalties or settlements, or any substantial regulatory fines or other penalties or sanctions, related to the ongoing regulatory and criminal investigations of Nortel in the U.S. and Canada; any significant pending civil litigation actions not encompassed by Nortel's proposed class action settlement; any substantial cash payment and/or significant dilution of Nortel's existing equity positions resulting from the approval of its proposed class action settlement; any unsuccessful remediation of Nortel's material weaknesses in internal control over financial reporting resulting in an inability to report Nortel's results of operations and financial condition accurately and in a timely manner; the time required to implement Nortel's remedial measures; Nortel's inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC), and Nortel's below investment grade credit rating and any further adverse effect on its credit rating due to Nortel's restatements of its financial statements; any adverse affect on Nortel's business and market price of its publicly traded securities arising from continuing negative publicity related to Nortel's restatements; Nortel's potential inability to attract or retain the personnel necessary to achieve its business objectives; any breach by Nortel of the continued listing requirements of the NYSE or TSX causing the NYSE and/or the TSX to commence suspension or delisting procedures;
(ii) risks and uncertainties relating to Nortel's business including: yearly and quarterly fluctuations of Nortel's operating results; reduced demand and pricing pressures for its products due to global economic conditions, significant competition, competitive pricing practice, cautious capital spending by customers, increased industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles, and other trends and industry characteristics affecting the telecommunications industry; the sufficiency of recently announced restructuring actions, including the potential for higher actual costs to be incurred in connection with these restructuring actions compared to the estimated costs of such actions and the ability to achieve the targeted cost savings and reductions of Nortel's unfunded pension liability deficit; any material and adverse affects on Nortel's performance if its expectations regarding market demand for particular products prove to be wrong or because of certain barriers in its efforts to expand internationally; any reduction in Nortel's operating results and any related volatility in the market price of its publicly traded securities arising from any decline in its gross margin, or fluctuations in foreign currency exchange rates; any negative developments associated with Nortel's supply contract and contract manufacturing agreements including as a result of using a sole supplier for key optical networking solutions components, and any defects or errors in Nortel's current or planned products; any negative impact to Nortel of its failure to achieve its business transformation objective; additional valuation allowances for all or a portion of its deferred tax assets; Nortel's failure to protect its intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; changes in regulation of the Internet and/or other aspects of the industry; Nortel's failure to successfully operate or integrate its strategic acquisitions, or failure to consummate or succeed with its strategic alliances; any negative effect of Nortel's failure to evolve adequately its financial and managerial control and reporting systems and processes, manage and grow its business, or create an effective risk management strategy; and
(iii) risks and uncertainties relating to Nortel's liquidity, financing arrangements and capital including: the impact of Nortel's most recent restatement and two previous restatements of its financial statements; any inability of Nortel to manage cash flow fluctuations to fund working capital requirements or achieve its business objectives in a timely manner or obtain additional sources of funding; high levels of debt, limitations on Nortel capitalizing on business opportunities because of support facility covenants, or on obtaining additional secured debt pursuant to the provisions of indentures governing certain of Nortel's public debt issues and the provisions of its support facility; any increase of restricted cash requirements for Nortel if it is unable to secure alternative support for obligations arising from certain normal course business activities, or any inability of Nortel's subsidiaries to provide it with sufficient funding; any negative effect to Nortel of the need to make larger defined benefit plans contributions in the future or exposure to customer credit risks or inability of customers to fulfill payment obligations under customer financing arrangements; any negative impact on Nortel's ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and further declines in the market price of Nortel's publicly traded securities, or the share consolidation resulting in a lower total market capitalization or adverse effect on the liquidity of Nortel's common shares. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K/A, 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.

(1)LG-Nortel and the LG-Nortel logo are trademarks of LG-Nortel.

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