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Rolls-Royce to Transform Network With Managed VoIP Service from Nortel


US$20 Million Voice Network Makeover Will Help Improve Telecommunications Service, Reduce Costs

JULY 11, 2006, LONDON - Rolls-Royce, a world-leading provider of power systems and services, will transform its entire telephone network into a single, advanced network providing VoIP services based on Nortel* [NYSE/TSX: NT] technology under a seven-year, estimated US$20 million managed services agreement.

The agreement will make Nortel the preferred provider of enterprise telephony solutions for the new Rolls-Royce global voice network, which will initially serve 26,500 users in the United Kingdom, the United States, Canada, Norway, Germany and France.

“We selected Nortel for this important network and telephony infrastructure transformation because they truly understand our communication needs and how to simplify our network infrastructure,” said Jim Reed, IT purchasing director, Rolls-Royce “Nortel’s expertise and experience in delivering a highly comprehensive and competitive managed service as well as its ability to build large, reliable networks designed for delivery of new services convinced us to select it as our preferred communications provider.”

“This is a real milestone for Nortel,” said Peter Kelly, president, enterprise solutions for Nortel in Europe and the Middle East. “Our proven global expertise in management and integration of voice and data networks enables us to deliver an approach that will help simplify Rolls-Royce’s telephony and provide a platform to address its future communications requirements as well.”

The new Rolls-Royce global voice network will provide comprehensive voice calling services, unified voice, fax and e-mail messaging, and a platform for introduction of advanced mobility services for communications and collaboration virtually anytime, anywhere.

Nortel will provide full lifecycle services for the Rolls-Royce network from the Nortel Global Services portfolio. This will include design, integration and deployment of IP telephony equipment and software, along with management and maintenance of both the existing TDM-based network and the new VoIP network. Network management and maintenance will consist of remote fault monitoring with proactive network surveillance, customer-defined service level agreements for response and resolution, moves and changes, comprehensive customer reporting, and dedicated service management.

Nortel’s enterprise VoIP solution for Rolls-Royce will include Nortel Communication Server 1000, Nortel CallPilot* for unified voice, fax and e-mail accessible from any location, and Nortel mobility services.

Nortel’s Global Services include a full range of integrated services for design, deployment, management and maintenance of end-to-end multi-vendor network solutions, including seamless migration to next generation technologies.

About Rolls-Royce

Rolls-Royce, the world leading provider of power systems and services for use on land, at sea and in the air, operates in four global markets - civil aerospace, defence aerospace, marine and energy.
Rolls-Royce has a broad customer base comprising 600 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces and more than 2,000 marine customers, including 70 navies. The company has energy customers in 120 countries. Rolls-Royce is a technology leader, employing around 36,000 people in offices, manufacturing and service facilities in 50 countries. For more information, visit Rolls-Royce on the Web at**.

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. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today’s barriers to efficiency, speed and performance by simplifying networks and connecting people with information. Nortel does business in more than 150 countries. 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. 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 finalization and approval of its proposed class action settlement, or if such proposed class action settlement is not finalized, any larger settlements or awards of damages in respect of such class actions; 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 objectives; 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 credit 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 credit facilities; 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 any future 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 Report 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.

*Nortel, the Nortel logo, the Globemark and CallPilot are trademarks of Nortel Networks.
**This is a 3rd party link as described in our Web linking practices.


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