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Nortel Investor Meeting: Update On Game-Plan For Future Growth


TORONTO – Speaking with the investment community, Mike Zafirovski, Nortel president and CEO, discussed how Nortel* [NYSE/TSX: NT] is successfully executing against its plan and is sharpening its focus on long-term competitiveness and growth. The interactive day-long event was held at Nortel’s headquarters in Toronto.

“One year ago, Nortel outlined a carefully thought out strategy to regain market leadership in the long term. A strong focus on operational improvements combined with key investments in growth markets framed the foundation of the plan.” said Zafirovski. “I am pleased to say we are making progress on all fronts. While there is more work to do, we are seeing traction with our customers and a wider acceptance of our technology. The accelerated evolution of the market demonstrates that the path we have chosen is the right one and that our focus areas will translate into long-term revenue growth and consistent profitability.”

At the event, senior executives described the exciting opportunities that are emerging in the industry and Nortel’s plan to compete and win.

Joel Hackney, Nortel’s recently appointed president of Enterprise Solutions, highlighted the evolution of the desktop and the opportunities this provides Nortel at the intersection of the IT and networking industries.

“Nortel is simply and effectively integrating communications-based applications with business processes to drive out the complexity faced by today’s enterprises,” said Hackney. “Across multiple methods of communications - from voice to conferencing to data networking - Nortel is providing enterprises with the industry’s most complete portfolio of unified communications (UC) solutions. In fact, the strength of Nortel’s UC portfolio was recently recognized in industry analyst research, which we view as a strong validation of our market differentiation. In addition, our Innovative Communications Alliance (ICA) with Microsoft has delivered more than 300 joint wins representing over 900,000 licenses.”

The proliferation of video and data applications is driving the need for network upgrades. Philippe Morin, president of Metro Ethernet Networks said: “The growth of video, including peer-to-peer, will have the same profound impact on networks as digital voice applications did several decades ago. To ensure network operators can increase available bandwidth quickly and affordably, Nortel delivers 40 Gbps optical solutions that will not only meet the current demand but also provide a smooth migration path to 100 Gbps without complex re-engineering”

Innovation is driving real competitive differentiation in municipalities worldwide as Nortel works with key customers to redefine the market. Morin added: “With the explosion of high-bandwidth video and data applications, the battle for metro infrastructure is also heating up. Nortel has taken a unique technology direction with our Provider Backbone Transport (PBT) which is simpler, more robust and more cost-effective than the conventional approach used today. Since our milestone contract with BT earlier this year, we have extended our leadership with 30 more carrier Ethernet contracts globally. In 2008 and beyond, we’ll focus on increasing our customer momentum and evolving our PBT offer.”

The wireless industry is presenting important opportunities to Nortel and its customers. 4G technologies such as LTE (Long Term Evolution) and WiMAX will power the future and Nortel is on the forefront of this new wave.

“The CDMA and GSM markets remain strong for Nortel, however, we have been making investments in the future of wireless to serve our customers’ expanding requirements. Nortel’s WiMAX solutions provide true mobile broadband faster and more cost-effectively than the competition,” said Richard Lowe, president, Carrier Networks. “Leapfrogging to 4G has great transformational potential for both established service providers as well as new entrants to the industry. In addition, 4G has the potential to deliver real socio-economic change for emerging countries that have previously not been able to afford the widespread deployment of advanced communications technologies.”

At the heart of today’s communications industry are two common elements: complexity and change. The way businesses and consumers are using technology is changing faster then ever before. To help customers navigate this complexity, Nortel is expanding its services and solutions capability, using its deep expertise in communications to help its customers simplify their businesses and, fundamentally, drive a new growth business for the company.

“Some within our industry underestimate the profound nature and complexity of the changes taking place. Nortel understands our customers’ challenges very well, and is delivering a comprehensive solutions portfolio that allows them to maximize their technology investments as well as to design, build and operate their networks,” said Dietmar Wendt, president, Global Services and Solutions, Nortel. “We are gaining traction in growth areas, rolling out targeted vertical solutions, and have the best portfolio of end to end multimedia solutions in the market. This includes a showcase Telepresence solution that brings together an ecosystem of partners to deliver a solution that is open and compatible with any other network - a claim our competitors can’t make.”

Commenting on Nortel’s ongoing transformation, Zafirovski concluded: “Today, we are engaging with customers at a fundamentally different level from a year ago. They are seeing proof of our determination to deliver best-in-class innovation more simply and cost-effectively. And, they are responding by signing-up with Nortel for the long-term, worldwide. Across the company, the engine room is improving, customers are responding and employees are delivering. We have a long road ahead of us, but the new Nortel is starting to take shape.”


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