June 06, 2005 09:02 ET

Mobility, Flexibility in Communications Driving Enterprise Convergence - Survey; Nortel Survey Indicates 85 Percent Now on Path to IP Telephony

ORLANDO, Fla.--(CCNMatthews - Jun 6, 2005) -

Mobility and flexibility in communications are driving the increasing enterprise convergence of multiple voice and data networks into one based on new Internet Protocol (IP) technologies, according to a Nortel (NYSE:NT) (TSX:NT) survey of 300 members of the International Nortel Networks User Association (INNUA).

The survey, analyzed by Webtorials, indicated that 85 percent of respondents have already started to converge or have plans to converge voice and data networks within the next five years, while 46 percent have fully deployed or are in the process of deploying a converged network. This is a six percent increase over the 79 percent of respondents in last year's survey. As well, 64 percent of survey respondents indicated that the greatest benefits of convergence are mobility and flexibility for employees.

"Nortel's survey suggests that enterprises recognize the value of business benefits possible through deploying mobility solutions for anywhere, anytime access to communication services," said Malcolm Collins, president, Enterprise Networks, Nortel.

"Mobility powers creativity and productivity in a wide variety of ways, such as providing opportunities for employees to sharpen skills through distance learning programs or allowing employees to work from remote locations, staying connected with customers, partners and suppliers, which may help improve profitability," Collins said.

"The continued move to a converged voice, data and video network mirrors what we're seeing in the industry as a whole," said Steve Taylor, president, Webtorials. "It's also noteworthy that the percentage of respondents that don't have any plans to converge dropped by about a quarter - from 21 percent a year ago to only 15 percent this year."

Additional benefits of convergence confirmed by survey respondents include the ability to deploy new multimedia applications and the reduction of network costs. According to respondents, critical value-added applications that are deployed or will be deployed include unified messaging, multimedia collaboration, video communication and contact centers.

The survey also asked if convergence requires changes in the management structure and whether respondents are going to deploy wireless local area networks (LANs). A majority of the respondents (74 percent) plan to have a combination of telecommunications and data networking staff primarily responsible for management of the converged network. The survey also showed that a majority of respondents currently use or are planning to deploy wireless LANs (72 percent). This represents a seven percent increase over 2004, while the planned use of voice over wireless LAN doubled from last year.

To meet the needs of its customers, Nortel has designed more reliable, secure solutions such as 'Office Anywhere' mobility. These solutions build on the strong foundation of the Virtual Enterprise, designed to allow dispersed employees to collaborate as effectively as if they were in the same office, regardless of physical location. These solutions further the graceful mobility evolution demonstrated by other mobility announcements with Research In Motion and on Nortel's broadened WLAN 2300 portfolio for enterprises of all sizes.

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, 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.

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