September 06, 2005 09:01 ET

Nortel Expands VoIP Leadership, Launches SIP-Based VoIP Services in Rural Markets

RESEARCH TRIANGLE PARK, N.C.--(CCNMatthews - Sep 6, 2005) -

Next Gen DMS-10 VoIP Solution Opens New Markets to Rural Voice Providers

Nortel (NYSE:NT) (TSX:NT) today announced the successful deployment of its next generation, SIP-enabled DMS-10 platform, bringing residential VoIP to the rural North American market.

This solution is designed to expand revenue opportunities for rural service providers by enabling them to offer services enabled by Session Initiation Protocol (SIP) such as VoIP through a simple, low-cost expansion of the DMS-10, the industry's most broadly deployed voice switch.

Nortel's rural VoIP solution gives DMS-10 subscribers the option to use traditional or VoIP primary phone service and allows users to add cost-effective secondary VoIP lines. Subscribers can also take advantage of VoIP mobility capabilities, which allow their phones to travel with them wherever they have broadband access, and the DMS-10 web portal which allows users to modify call features and call routing. More than 75 service providers are already scheduled to deploy Nortel's rural VoIP enabled solution this year with volume shipments planned for October 2005.

"Nortel is bringing the benefits of SIP to the DMS platform," said Joe McGarvey, senior analyst for carrier IP telephony infrastructure, Current Analysis. "Thanks to Nortel's solution, rural customers can now get VoIP lines in their home with a telephone number in their local community and with service from a local trusted carrier."

Nortel's DMS-10 platform allows independent service providers and rural market carriers to seamlessly advance their networks to a new, cost-effective packet infrastructure at their own pace without expensive upgrades to the network. With the new SIP-enabled enhancements, service providers now have the capability to offer new revenue generating services such as primary or secondary line service over any broadband facility, mobility options with IP phones and clients, and service bundles such as VoIP coupled with the subscriber's existing broadband or long distance service.

Market research conducted by Nortel indicates that a VoIP offering has the potential to stimulate additional broadband service subscriptions in rural areas. Rural carriers can provide these services out-of-territory as well to expand their subscriber base.

"We are happy to see the DMS-10 evolve to a packet-based solution," said Norman T. Welker, president of Colchester, Ill.-based McDonough Telephone, which has approximately 4,200 lines. With the addition of SIP-based services, we will be able to offer VoIP and phone service beyond our local territory to expand our subscriber base."

"By offering VoIP to our customers, we will be better able to address the increasing mobility needs of our broadband service customers," said George Strandell, general manager and CEO of Golden West in Wall, S.D., which serves approximately 47,000 subscribers. "VoIP will enable us to give our customers the ability to make calls from the road as if they were at home and to offer the advanced telephony services our customers are asking for."

"Nortel understands the challenges we face in evolving our infrastructure to a next generation, packet-based network and continues to demonstrate its commitment to rural market providers," said Roy Cranford, translations engineer for Randolph Telephone, which is based in Asheboro, N.C. and services 15,000 lines. "By delivering the SIP-enabled DMS-10, Nortel has given us the ability to evolve our network at our own pace to meet our subscribers' growing telephony needs. Our deployment went exceptionally well, including calls placed from a user 200 miles away while on vacation!"

Nortel is taking the new solution on the road as part of its Next Generation Networks Rural Market Tour 2005. For more information on locations and dates of the tour, please visit locations.html. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Nortel ranked number one in the global markets for service provider soft switches and gateways for the entire year of 2004 and for the first quarter of 2005, according to Synergy Research Group. Nortel is providing VoIP and multimedia solutions to many of the world's leading service providers, including Bell Canada, Cox Communications, OneConnect, Rogers Communications, SaskTel, Sprint, Verizon, and VIVO in Brazil.

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; any undetected product defects, errors or failures; 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, the Globemark, DMS and DMS-10 are trademarks of Nortel Networks. CableLabs and PacketCable are trademarks of Cable Television Laboratories, Inc.

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