May 02, 2007 10:57 ET

Nortel CEO Defines Future at Annual Shareholder Meeting

New Nortel Well-Positioned to Capitalize on Key Industry Inflection Point

OTTAWA, ONTARIO--(CCNMatthews - May 2, 2007) - Speaking today at Nortel's(1) (TSX:NT)(NYSE:NT) Annual and Special Meeting for Shareholders at its R&D headquarters, President and CEO, Mike Zafirovski highlighted progress against the Company's six-point plan, discussed the strategy to build a new Nortel, and shared his vision for company's future.

"Nortel today is different than the Nortel of a year ago," said Zafirovski. "I see a new Nortel emerging, a Nortel that is focused on the customer. A Nortel that grows and creates value as we help our customers seize the opportunities that exist in the market."

Zafirovski discussed how through market analysis and customer interaction, Nortel shaped its strategy into three areas of focus: to lead in Transformed Enterprise, to lead in Next-Generation Mobility and Convergence, and to have a significant presence in Services and Solutions.

Zafirovski also noted several customer wins - such as the Verizon, BT and the Vancouver Organization Committee for the 2010 Olympics - as evidence of Nortel's growing strength in the market.

"Nortel is on the offense again for the first time in many years," Zafirovski said. "We are attacking, winning customers, and gaining market momentum."

Seizing the Opportunities of Hyperconnectivity

In his remarks, Zafirovski discussed the future of communications and how Nortel is prepared to seize the new opportunities emerging in the market.

"The demand for multiple connections, anywhere anytime and from any device is exploding," said Zafirovski. "It is a phenomenon being driven by the proliferation of handheld devices and the convergence of wired, wireless and IP. Cameras, MP3 Players, security systems, appliances and much more are all demanding to be connected."

The term for this trend is "Hyperconnectivity", which encompasses person-to-person communication, person-to-machine and machine-to-machine. Hyperconnectivity is fueling huge increases in bandwidth demand because of the complexity, diversity and integration of new applications and devices using the network.

Underscoring this challenge is the prediction that the amount of information created in 2007 will surpass, for the first time, the storage capacity available, according to global research firm, International Data Corp. The rise of wireless broadband will magnify those trends even further.

"Imagine if every MP3 player was suddenly connected over a wireless broadband connection. The market for mobile devices and mobile data traffic would double," said Lawrence Surtees, vice-president of communications research at IDC Canada Ltd. of Toronto. "Imagine if every chronically ill patient could receive medical monitoring at home through wireless sensors and PDAs that continually feed vital signs into a broadband-enabled network, more patients could continue to live in their homes, reducing costs and increasing the quality of healthcare provided to an aging population."

Zafirovski explained that, with Hyperconnectivity, a new era in telecommunication is unfolding and a key inflection point is being reached. "Our strategic direction is focused on making it easy for our customers to capitalize on this inflection point. We believe that Nortel is uniquely positioned in this area. We have the breadth of vision, the experience and the scope of resources needed to deliver on Hyperconnectivity. We have done it in the past. And we will do it again."

Zafirovski pointed to Nortel's leadership in wireline and wireless, the Company's expertise in applications and infrastructure, and its leadership in the enterprise and carrier spaces -- combined with global services capabilities and an ecosystem of the right partners -- as providing Nortel with the right formula for success.

"We will match our knowledge and capabilities with the trends in the industry to bring value to our customers and value to our shareholders," concluded Zafirovski.

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 For the latest Nortel news, visit

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 business including: significant competition, competitive pricing practice, cautious capital spending by customers, 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; any material, adverse affects on Nortel's performance if its expectations regarding market demand for particular products prove to be wrong; the sufficiency of recently announced restructuring actions; any negative developments associated with Nortel's suppliers and contract manufacturing agreements including our reliance on certain suppliers for key optical networking solutions components; potential penalties, damages or cancelled customer contracts from failure to meet delivery and installation deadlines and any defects or errors in Nortel's current or planned products; fluctuations in foreign currency exchange rates; potential higher operational and financial risks associated with Nortel's efforts to expand internationally; potential additional valuation allowances for all or a portion of Nortel's deferred tax assets if market conditions deteriorate or future results of operations are less than expected; a failure to protect Nortel's intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; any negative effect of a failure to maintain integrity of Nortel's information systems; changes in regulation of the telecommunications industry or other aspects of the industry; any failure to successfully operate or integrate strategic acquisitions, or failure to consummate or succeed with strategic alliances; Nortel's potential inability to attract or retain the personnel necessary to achieve its business objectives or to maintain an effective risk management strategy;
(ii) risks and uncertainties relating to Nortel's liquidity, financing arrangements and capital including: 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 senior notes covenants, or on obtaining additional secured debt pursuant to the provisions of indentures governing certain of Nortel's public debt issues; Nortel's below investment grade credit rating; 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; or any negative impact on Nortel's ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and any declines in the market price of Nortel's publicly traded securities; and
(iii) risks and uncertainties relating to Nortel's prior restatements and current restatement and related matters including: any negative impact on Nortel and NNL of the current restatement; 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; the significant dilution of Nortel's existing equity positions resulting from the approval of its class action settlement; any significant pending or future civil litigation actions not encompassed by Nortel's class action settlement; any unsuccessful remediation of Nortel's material weakness 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; Nortel's inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC); or 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. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K 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.

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Use of the terms "partner" and "partnership" does not imply a legal partnership between Nortel and any other party.

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