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Nortel to Provide Communications for First International High-Speed Railway Line in Spain


GSM-R Allows Full Interoperability Between French, Spanish Railway Networks

OCTOBER 04, 2006 - Madrid, Spain - TP Ferro, a Spanish and French railway consortium, will use railway communications technology from Nortel* [NYSE/TSX: NT] for the new 44 km high-speed Figueres - Perpignan line currently being built between Spain and France.

The GSM-R network will also support vital uninterrupted communications throughout a sophisticated eight kilometer tunnel across the Pyrenees, providing a new rail alternative for passengers and merchandise.

Expected to open in early 2009, the new Figueres-Perpignan line will be part of the trans-European transport network initiative promoted by the European Union. It will be integrated into the Southwest Europe High-Speed Train Axis. As part of its common transport policy, the EU has adopted legislation to pave the way for gradual establishment of an integrated European railway area, both legally and technically. This involves the development and implementation of Technical Specifications for Interoperability including communications for which GSM-R plays an important role.

TP FERRO is a company created by the Spanish ACS and the French Eiffage, both leaders in the infrastructures area in Europe, for the construction, operation and maintenance of this new high speed railroad line mixed traffic between Figueres and Perpignan. IFP is the consortium integrated by construction contractors Spanish Cobra and French Forclum responsible for the construction and engineering work. Nortel is providing the GSM-R network and engineering, installation, integration, project and consultancy services for IFP.

“Nortel’s GSM-R solution allows the complete integration of vital rail communications between the GSM-R networks of the French Réseau Ferré de France (RFF) and the Spanish Administrador de Infraestructuras Ferroviarias (ADIF),” said Victor Sanz, project director, IFP Figueres-Perpignan. “Interoperability of communications is a key element of the trans-European rail system that is designed to reduce travel times across international borders significantly for all kind of railway users.”

“GSM-R provides railway operators and infrastructure owners with improved voice and data services tailored for railway operations, supporting high-speed train operation of up to 500 kilometers per hour,” said Michel Clement, president Southern Europe and Africa, Nortel. “GSM-R improves operational communication and helps to advance staff performance and employee safety through safe and uninterrupted communication in day-to-day operation.”

Nortel is a world leader in GSM-R technology and has been selected to deploy GSM-R networks in three continents and ten countries, including national deployments for the three largest railway operations in Europe - RFF in France, Network Rail in Great Britain and Deutsche Bahn in Germany. Nortel has also deployed GSM-R networks for railway lines between Bilbao and Santander for Spain’s Adif.

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 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

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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.

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