Nortel
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TSX : NT

Nortel

July 12, 2007 09:00 ET

Nortel Receives Contract Extension from T-Mobile USA to Deliver Mobile Services

Network Upgrade to Improve Quality, Reliability for 26 Million Wireless Subscribers

DALLAS, TEXAS and BELLEVUE, WASHINGTON--(Marketwire - July 12, 2007) - T-Mobile USA Inc. and Nortel(1) (TSX:NT)(NYSE:NT) have signed a US$150 million multi-year extension to their contract to deliver mobile voice and data services. T-Mobile USA serves 26 million wireless subscribers across the United States and is a wholly-owned subsidiary of T-Mobile International, the mobile arm of Deutsche Telekom AG.

Nortel will continue to upgrade T-Mobile's network and supply GSM wireless equipment and associated professional services. The upgrades are designed to help boost T-Mobile's network efficiency and capacity, and enable T-Mobile to continue to satisfy traffic growth while making the most efficient use of available spectrum.

"T-Mobile USA's previous deployments with Nortel enabled us to support more subscribers with a marked improvement in network performance, capacity and call quality," said Neville Ray, senior vice president of engineering operations, T-Mobile USA.

"T-Mobile is known for bringing a high-quality mobile experience to subscribers and Nortel's GSM networking gear is part of what makes that promise possible," said Richard Lowe, president, Carrier Networks, Nortel. "Nortel continues to invest in GSM technology, working to increase the capacity and quality of networks for our customers while driving down the costs. For operators focused on a world-class 2.5G solution, or looking long term at 4G, Nortel's GSM systems provide an excellent platform to meet the demands of today's most popular wireless applications."

As part of the new extended agreement, Nortel will provide GSM infrastructure equipment and services across T-Mobile's nationwide network. This continues a long-standing relationship between the companies. Nortel has supported GSM network planning and deployment for T-Mobile USA since the company's inception as VoiceStream Wireless in 1995.

About T-Mobile USA

Based in Bellevue, Wash., T-Mobile USA, Inc., is a member of the T-Mobile International group, one of the world's leading companies in mobile communications, and the mobile telecommunications subsidiary of Deutsche Telekom AG. At the end of March 2007, nearly 110 million mobile customers were served by companies of the Deutsche Telekom group - 26 million by T-Mobile USA - all via a common technology platform based on GSM, the world's most successful digital wireless standard. T-Mobile's innovative wireless products and services help empower people to connect effortlessly to those who matter most. Multiple independent research studies continue to rank T-Mobile highest, in numerous regions throughout the U.S., in wireless call quality and wireless customer care. For more information, please visit the company's Web site at www.t-mobile.com.(2) T-Mobile® is a federally registered trademark of Deutsche Telekom AG.

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 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.

(1)Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

(2)This is a 3rd party link as described in our Web linking practices.

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