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Telefónica Wholesale Expands Optical Network in Latin America with Nortel


Doubles Capacity of Latin America Network to Support Advanced Telecommunications Services

DECEMBER 05, 2005, BUENOS AIRES, Argentina - Telefónica International Wholesale Services (Emergia) has doubled it’s optical fiber network capacity throughout Latin America with services and optical solutions from Nortel* [NYSE/TSX: NT].

This expansion of Telefónica Wholesale’s SAM-1 fiber optical ring creates one of the most advanced networks linking the Americas and Europe while doubling capacity to meet increasing demand for advanced high-speed communication services by business and residential subscribers. Telefónica’s network connects Argentina, Brazil, Chile, Guatemala, Peru, Puerto Rico and the United States with Europe.

“Nortel has been working closely with Telefónica Wholesale for more than five years - from the original launch of its network to ongoing optimization of its regional network with industry-leading optical solutions,” said Ricardo Casal, managing director, Southern Cone, Nortel. “This current expansion gives Telefónica Wholesale one of the most modern and capable infrastructures in Latin America, positioning it as International Telecommunications Operator reference in Latin America.”

For its network expansion, Telefónica Wholesale has implemented Nortel Optical Long Haul 1600 and Optical Cross Connect DX to double its backbone capacity to 80 Gbps. Nortel Optical Long Haul 1600 is a 10 Gbps platform that uses DWDM to split light to improve traffic capacity to 80 Gbps, and is designed to maximize capacity on each fiber pair, offering more improved capacity with lower costs. Nortel Optical Cross Connect DX optical switch is designed to enable service providers to increase network capacity, flexibility, reliability and optimize network management capabilities. This platform is one of the most flexible 10 Gbps optical switches in the world with more than 6,500 deployments and 100 customers.

Nortel provided network and site engineering, installation, commissioning and testing services for the Telefónica Wholesale optical network expansion. Nortel will continue to provide network maintenance services, including technical support and repair services, under a maintenance agreement that extends through mid-2007. This will enable Telefónica Wholesale to reduce network downtime and business risk while promoting efficient network operations and improved customer satisfaction.

Nortel offers a full range of integrated professional services to provide end-to-end, multi-vendor network solutions that deliver significant business value for customers. Nortel provides the necessary services to successfully design, deploy, manage and maintain today’s multi-vendor networks and to facilitate transition to next generation technologies.
Deployed in more than 1,000 customer networks in 65 countries, Nortel’s end-to-end optical network portfolio includes next generation SONET/SDH, optical switching products, DWDM solutions, and Optical Ethernet products. Nortel has deployed more than 329,000 network elements globally.

About Telefónica International Wholesale Services

Telefonica International Wholesale Services is the organization within the Telefonica Group that provides international wholesale services globally. The portfolio of Telefonica International Wholesale Services, mainly addressed to international carriers, includes voice, IP, data and capacity services, offering direct connectivity between Latin America, the US and Europe through its fiber-optic international network. Telefonica Wholesale has an international data network is complemented by domestic networks throughout 10 countries in Latin America, US and Europe, and more than 1.500 PoPs. It also owns an international OC-192 IP backbone network and has more than 150 direct connections with international carriers.

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 For the latest Nortel news, visit

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 ongoing 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); 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; general stock market volatility; 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; the future success of Nortel’s strategic alliances; and certain restrictions on how Nortel and its president and chief executive officer conduct business. 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.


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