Nortel
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Nortel

April 11, 2007 04:00 ET

Reseau Ferre de France, Nortel to Speed Modernization of Railway Communications

Nortel Named Exclusive GSM-R Supplier in First RFF Public-Private Partnership

PARIS, FRANCE--(CCNMatthews - April 11, 2007) - Reseau Ferre de France (RFF), owner and operator of the French rail network, has selected Nortel(1) (TSX:NT)(NYSE:NT) as the exclusive supplier of telecommunications equipment for its national railway network under a public-private partnership (PPP). The railway communication network supplied by Nortel will provide RFF with improved voice and data services to support operations of conventional and high-speed rail lines across France.

Nortel's selection follows the commercial launch in the summer of 2006 of the RFF core communications network which is based on RFF's Nortel-supplied Mobile Services Switching Center (MSC). The new network will support the existing French national radio network, including the East of France railway line from Paris to Bar le Duc. This line is already in service and the high-speed line from Paris to Strasbourg is scheduled to open in mid-2007.

The PPP for the GSM-R (Global System for Mobile Communication - Railway) network is the first of its type for RFF, providing an innovative method for financing, deploying, operating and maintaining GSM-R networks. The partnership will enable RFF to speed modernization of its ground-to-train radio system while maintaining interoperability and continuity of service with existing infrastructure.

"Working closely with Nortel we'll be able to accelerate deployment of a modern, interoperable infrastructure with reinforced operational requirements while getting implementation and operating costs under control," said Jean-Marc Charroud, director, Project Deployments, RFF. "By progressing our communications, we're also enhancing our service reliability and safety, improving communications between railway workers, and offering new services to railway companies and their customers."

"This is another stage on our journey with RFF which began in 2003 when we were selected to provide the first voice and data services for the French railway network," said Michel Clement, president, Southern Europe and Africa, Nortel. "Nortel has unique experience in deploying GSM-R networks globally and we are firmly committed to GSM. And, having traveled this far with RFF, the new public-private partnership is a great opportunity for Nortel to help RFF achieve its business goals and make the project a real success."

A world leader in GSM-R technology, Nortel has to date been selected to deploy GSM-R networks in 10 countries on three continents. These include national deployments for the three largest railway operations in Europe - RFF, Network Rail in Great Britain and Deutsche Bahn in Germany. Most recently, Nortel was selected by the Algerian SNTF (Societe Nationale des transports Ferroviaires) to provide the first GSM-R network on the African continent and by TP Ferro for the Figueras-Perpignan high-speed line connecting Spain and France.

Nortel has been a pioneer in the GSM-R standards process since 1992, and works with Union Internationale des Chemins de Fer (UIC) and the Europe Telecommunications Standards Institute (ETSI) on standards improvements. Nortel supplied equipment for the initial Mobile Radio for Railways Networks in Europe (MORANE) trial and was a major contributor to the European Integrated Railway Radio Enhanced Network (EIRENE) GSM-R standard.

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 restatements and related matters including: Nortel's most recent restatement and two previous restatements of its financial statements and related events; the negative impact on Nortel and NNL of their most recent restatement and delay in filing their financial statements and related periodic reports; 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; any significant pending civil litigation actions not encompassed by Nortel's proposed class action settlement; any substantial cash payment and/or significant dilution of Nortel's existing equity positions resulting from the approval of its proposed class action settlement; any unsuccessful remediation of Nortel's material weaknesses 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; the time required to implement Nortel's remedial measures; Nortel's inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC), and Nortel's below investment grade credit rating and any further adverse effect on its credit rating due to Nortel's restatements of its financial statements; any adverse affect on Nortel's business and market price of its publicly traded securities arising from continuing negative publicity related to Nortel's restatements; Nortel's potential inability to attract or retain the personnel necessary to achieve its business objectives; 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;
(ii) risks and uncertainties relating to Nortel's business including: yearly and quarterly fluctuations of Nortel's operating results; reduced demand and pricing pressures for its products due to global economic conditions, significant competition, competitive pricing practice, cautious capital spending by customers, increased 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; the sufficiency of recently announced restructuring actions, including the potential for higher actual costs to be incurred in connection with these restructuring actions compared to the estimated costs of such actions and the ability to achieve the targeted cost savings and reductions of Nortel's unfunded pension liability deficit; any material and adverse affects on Nortel's performance if its expectations regarding market demand for particular products prove to be wrong or because of certain barriers in its efforts to expand internationally; any reduction in Nortel's operating results and any related volatility in the market price of its publicly traded securities arising from any decline in its gross margin, or fluctuations in foreign currency exchange rates; any negative developments associated with Nortel's supply contract and contract manufacturing agreements including as a result of using a sole supplier for key optical networking solutions components, and any defects or errors in Nortel's current or planned products; any negative impact to Nortel of its failure to achieve its business transformation objective; additional valuation allowances for all or a portion of its deferred tax assets; Nortel's failure to protect its intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; changes in regulation of the Internet and/or other aspects of the industry; Nortel's failure to successfully operate or integrate its strategic acquisitions, or failure to consummate or succeed with its strategic alliances; any negative effect of Nortel's failure to evolve adequately its financial and managerial control and reporting systems and processes, manage and grow its business, or create an effective risk management strategy; and
(iii) risks and uncertainties relating to Nortel's liquidity, financing arrangements and capital including: the impact of Nortel's most recent restatement and two previous restatements of its financial statements; 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 support facility covenants, or on obtaining additional secured debt pursuant to the provisions of indentures governing certain of Nortel's public debt issues and the provisions of its support facility; 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; any negative impact on Nortel's ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and further declines in the market price of Nortel's publicly traded securities, or the share consolidation resulting in a lower total market capitalization or adverse effect on the liquidity of Nortel's common shares. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K/A, 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.

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

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