Unity Media Deploys Nortel’s Optical Ethernet to Deliver ‘Triple Play’ Cable Services

New Network Reduces Operational Costs, Creates New Revenue Opportunities

DECEMBER 19, 2005, FRANKFURT, Germany - Unity Media GmbH has deployed a Nortel* (NYSE/TSX:NT) Optical Ethernet network to support ’triple play’ cable services such as VoIP, video-on-demand, and Internet. The recently formed German cable operator Unity Media is the proprietor of established cable network operators ish and iesy.

The Unity Media network consolidates the subscriber services of cable network operators ish and iesy and serves more than five million customers in Germany’s North Rhine-Westphalia and Hessen regions. Nortel’s Optical Ethernet solution is helping Unity Media to drive down operational costs and create new revenue by enhancing its service portfolio and expanding its service area.

“Nortel enabled us to successfully unite the ish and iesy networks to create Europe’s largest interconnected cable network,” said Colin Buechner, senior vice president Network Operations and Technology, Unity Media. “Now we can deliver a full range of entertainment and multi-media services, including digital TV, video-on-demand, Internet and telephony, into more homes from a single source. We chose Nortel because of its leadership and proven experience in delivering Optical Ethernet networks on time. These strengths have been critical in helping us meet the new capacity requirements created by the merger of ish and iesy in a very tight timeframe.”

Unity Media’s Optical Ethernet network was planned, implemented and put into commercial operation in just six weeks.

“By consolidating the Ethernet transport of iesy and ish subscriber services over a single multiservice optical backbone, we were able to satisfy Unity Media’s immediate capacity needs,” said Peter Newcombe, president Carrier Networks, Nortel. “The newly deployed network also has room for future growth as Unity Media adds new services and subscribers.”

The Nortel solution deployed for Unity Media provides multiple Gigabit Ethernet interfaces to support video transport and Internet data and is based on Nortel’s Optical Metro 5000 product. The network solution makes use of the Gigabit Ethernet Muxponder card that permits 10 x Gigabit Ethernet service on a single 10 Gbps wavelength. This solution maximises use of each wavelength capacity, minimises the initial cost of deployment, and enables network and service expansion. The additional ability to provide transparent connectivity for native 10 Gigabit Ethernet LAN and WAN service traffic provides further network scalability and efficiency.

About Unity Media
Unity Media is headquartered in Cologne and is the proprietor of the Hessian cable network operator iesy and the North Rhine-Westphalian cable network operator ish. The two companies are the largest providers of cable television in their respective states. In addition to analogue cable services, ish and iesy also offer digital television, high-speed Internet and telephony. On 30 September 2005, Unity Media had approximately 5.2 million basic cable customers, 101,100 digital TV customers, 30,300 high speed Internet customers, and 11,500 telephone lines. More information on Unity Media can be found at http://www.unitymedia.de**

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 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


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Sabine Werb

Nortel

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