May 07, 2008 10:52 ET

Nortel CEO Outlines Progress at Annual Shareholders Meeting

Zafirovski Discusses Growing Customer Momentum

OTTAWA, ONTARIO--(Marketwire - May 7, 2008) - Speaking today at Nortel's(1) (TSX:NT)(NYSE:NT) Annual Shareholders Meeting, President and CEO Mike Zafirovski highlighted Nortel's progress against its business transformation plan and discussed the company's growing momentum with customers.

"We have been hard at work transforming Nortel to return it to industry leadership - to re-create the great company that we all know Nortel is capable of being: a company that can consistently deliver value to customers, shareholders and employees," said Zafirovski. "Everyday, we are taking steps towards remaking Nortel into an industry powerhouse."

Building Nortel for the future requires focusing not only on technology but on customer needs and operational excellence explained Zafirovski. "Customers today are searching for services and solutions that help them solve their business issues - not just new products. They want to drive down their integration costs and capture key savings to help them compete. They want, in essence, Business Made Simple."

"We see a big opportunity to step forward and become the 'voice of the customer' within communications and technology markets by driving innovation in ways that solves our customers' biggest challenges," said Zafirovski. "We are turning customer focus into a competitive advantage by improving satisfaction and influencing purchasing behavior."

"Not just in our labs, but in the marketplace and with our customers today we are driving innovations in unified communications and wireless broadband; innovations in 40G, which increases bandwidth without ripping up and replacing existing networks. We are also raising the intelligence of communications networks through PBT and enabling the mobile workplace of the future with our Telepresence solutions. All this to meet the needs of Hyperconnectivity in a connection hungry world."

"Nortel has been an important partner to Verizon since we first launched CDMA services," said Dick Lynch, Verizon's executive vice president and chief technology officer, separately. "They have been with us every step of the way as we've built the most reliable wireless network in the U.S. With the explosive uptake of broadband services we're seeing today, we are already anticipating the need to move to the next generation of mobile networking. We're pleased to be working closely with Nortel this year to trial LTE and confirm its performance."

Nortel is not only addressing customer needs through innovation, but through operational initiatives as well. Nortel has launched almost 200 Lean Six Sigma projects designed to reduce costs and differentiate itself from the competition.

Nortel's growing momentum with customers is evidence of progress against the company's business transformation plan said Zafirovski. "Our customer engagements are proving our relevance and momentum. A new Nortel has emerged and we have the traction to prove it."

Capitalizing on Hyperconnectivity

Last year, Nortel articulated a strategy for seizing the opportunities of Hyperconnectivity, where every device and application that could benefit from being connected, would be.

"The phenomenon of Hyperconnectivity is placing increasing demands on our industry, but it is also driving a potentially huge opportunity," said Zafirovski. "Some of the pillars that drive Hyperconnectivity - unified communications, 4G wireless broadband, 40/100G and 10G Ethernet and related applications - are expected to grow in excess of 35 percent annually. Focusing on these high-growth areas, in a strategic way, will help us establish entry points for increasing growth and relevance in key customer segments."

Several customers commented on their relationships with Nortel:

"The power of unified communications opens new opportunities for businesses that need to communicate in real time," said Steve Ford, president, INNUA, an independent organization comprised of more than 4,000 Nortel customers globally. "In this information age, the speed of the decision making process provides real competitive differentiation. The acceleration of communications when you are able to reach the right person immediately provides a considerable advantage in the sharing of ideas -- the lifeblood of business. Nortel has taken a very collaborative approach with customers from all enterprise segments and has purpose-built tailored solutions designed for simplicity, performance, a verifiable ROI and reduced energy consumption that have struck a chord with the customer community."

"Nortel's Unified Communication solutions allow us to deliver to our customers the most advanced and cost-efficient technology that enables them to focus on their core business," said Jeanette Jager, product and marketing director, TDC Sweden. "The solutions deliver enterprise-critical applications with lower cost and industry-leading mobility features. In fact, we have seen recent deployments with customers achieving multimillion dollar savings when implementing Nortel unified communications solutions. Working with Nortel has enabled us to focus on meeting our customers' requirements to deliver next-generation communications simply and affordably."

"For years, Nortel has helped us build, manage and maintain our voice network and keep it current," said Chris Kent, director of network services for the Spring Independent School District, located 20 miles north of downtown Houston, Texas. "More than just a supplier, they have become a valued extension of our staff. They understand our needs and deliver complete solutions including both technology and services. Nortel's new Voice Security Services offering provides a perfect example. They're providing the technology and the services expertise to keep our voice network safe from hackers and fraud."

"The aim of our 40G trial was to ensure we continue to meet the growing capacity needs of the high-speed services we deliver and provide a quality experience for Virgin Media customers," said Daniel Hennessy, Virgin Media's director of Technical Architecture, yesterday. "Network assets can be scaled to meet the growth in demand associated with evolving customer behavior and step changes in the products provided as part of our high-speed broadband proposition. Our optical network will provide a solid foundation for growth as it takes advantage of technology designed to avoid electrical regeneration and where possible reduce the incremental cost of scaling transport capacity."

In addition, more than 50 enterprise customers have recently chosen Nortel data solutions globally.

In his closing remarks to the annual shareholders meeting, Zafirovski explained that Nortel has made solid financial progress that the company could build upon in 2008. "The leadership team sees the potential of this company and I believe, more than ever, that we are on the right path today and are rebuilding our company the right way."

"We have improved employee and customer satisfaction. We have made progress on our business transformation plan and customers are coming on board," said Zafirovski. "In 2008, we will continue the progress we've made but faster, deeper and more effectively through accelerated execution."

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 from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K, 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.

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