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Nortel

August 31, 2005 13:00 ET

Telefonica Moviles Launches Wireless High-Speed, Broadband Services in Guatemala with Nortel EV-DO Solutions; Telefonica Subscribers Now Able to Navigate Internet at High Speeds

GUATEMALA CITY--(CCNMatthews - Aug 31, 2005) -

Telefonica Moviles has launched its 3G mobile broadband services in Guatemala using CDMA2000 1xEV-DO technology from Nortel (NYSE:NT)(TSX:NT).

The new EV-DO high-speed network allows Telefonica to expand its subscriber services to include 'anytime, anywhere' access to a variety of services such as Web browsing and downloads of large video and music files at speeds comparable to wireline broadband connections like DSL. Telefonica also plans to offer its business customers secure mobile access to their corporate data networks from any wireless device, making it possible to remain productive when away from the office.

Telefonica Moviles Guatemala selected Nortel in May 2005 as the sole supplier of its advanced wireless broadband network in Guatemala.

"Nortel's technology and services have allowed us to modernize our network to provide the most innovative services to our subscribers in Guatemala," said Juan Antonio Abellan, general manager, Central America, Telefonica Moviles. "As one of the leading mobile services operators in the Spanish-speaking world, Telefonica is always anticipating the needs of the increasingly more sophisticated end-user, and we knew we could depend on Nortel's EV-DO solution to deliver on their expectations."

Telefonica Moviles new EV-DO network allows customers to download data on their mobile devices at speeds up to 2.4 megabits per second with average speeds of 300 to 500 kilobits per second - approximately 10 times faster than currently available networks. Such speeds also enable transmission of TV to an EV-DO enabled PDA. Nortel demonstrated this capability for Telefonica customers at a launch event in Guatemala City. Wireless operators around the world are beginning to use their existing networks to offer TV and other advanced video services that can include high-definition programming, video conferencing, remote surveillance and distance learning.

"We have worked closely with Telefonica in Guatemala to deploy a reliable and robust network that meets their needs and positions them as an innovative provider of mobile services to their subscribers in Guatemala," said Alvio Barrios, vice president, sales, Caribbean and Latin America, Nortel. "Nortel's EV-DO technology is designed to give wireless subscribers what they expect - fast and easy access to information and entertainment 'anytime, anywhere' to help enhance the quality of their lives."

Nortel supplies EV-DO equipment to 12 of the 21 operators across the globe currently offering commercial EV-DO service, including Verizon Wireless in the United States, Vesper in Brazil, Smartcom in Chile, Pelephone in Israel and Telstra in Australia. Nortel also provided EV-DO equipment to Eurotel for the first commercial 450 MHz EV-DO service in Eastern Europe. With its CDMA equipment designed to support 1xEV-DO through modular upgrades to existing hardware, Nortel re-uses existing base station equipment to help operators reduce or eliminate the need for costly hardware replacements.

Nortel has worked with operators in the Caribbean and Latin America for more than 35 years, building advanced telecommunication networks. Nortel is a leading provider of advanced wireless technologies in the region, with recent 3G deployments in the Dominican Republic (Verizon Dominicana), Peru (Telefonica Moviles), Puerto Rico (Centennial), Belize (Speednet), Trinidad & Tobago (LaqTel) and Chile (Smartcom). Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries.

Nortel was the first supplier with wireless networks operating in all advanced radio technologies and is the only end-to-end provider of all next generation wireless solutions.

About Telefonica Moviles

Telefonica Moviles operates all of Grupo Telefonica's wireless assets around the world. Currently, Telefonica Moviles has more than 80 million clients in 15 countries. In 2004, it had revenues of (11,827.6 million) euros. With operations in three continents -- Spain, Morocco, Brazil, Mexico, Guatemala, El Salvador, Panama, Nicaragua, Venezuela, Colombia, Peru, Ecuador, Argentina, Chile and Uruguay -- Telefonica Moviles has a unique presence in Latin America, and is number one or number two in practically all countries where it operates. Telefonica Moviles has a privileged position to capture the important growth potential in this region.

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 www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

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 and the Globemark are trademarks of Nortel Networks. CDMA 2000 is a trademark of the Telecommunications Industry Association (TIA).

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