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Nortel Acquires Pingtel’s Business to Extend Unified Communications Capabilities


Pingtel Advanced Software Adds New Offerings Quickly to Nortel Portfolio

TORONTO – Nortel* [NYSE/TSX: NT] today announced its acquisition of Pingtel Corp.’s business. U.S.-based Pingtel** is a designer of software-based unified communications solutions and is owned by Bluesocket Inc**, an enterprise mobility solutions provider. Pingtel will provide new software capabilities to Nortel’s enterprise unified communications portfolio, as well as additional research and development capabilities. This transaction brings Pingtel’s existing original equipment manufacturer (OEM) relationship with Nortel in-house.

Under the terms of the agreement, Nortel will acquire the key assets of Pingtel from Bluesocket Inc. Financial terms were not disclosed. Pingtel employees will be integrated into Nortel’s Billerica, Massachusetts facilities.

“This acquisition is another building block in Nortel’s vision to be a software-centric company and the leading provider of unified communications solutions,” said David Downing, general manager, Enterprise and SMB Communications Systems, Nortel. “We believe that bringing Pingtel’s critical R&D capabilities in-house will enable us to further develop software-based solutions that go beyond the boundaries of our previous OEM relationship. We expect that this will enable Nortel to accelerate the development of new IT-centric channels to market.”

“Pingtel has established itself as a unified communications vendor with market-leading, very sophisticated solutions based on interoperable software that can run on a multitude of hardware platforms,” said Martin Steinmann, senior vice president, marketing at Pingtel. Steinmann has joined Nortel as part of the transaction and will take on an expanded role in business development for next generation solutions and new routes to market in the small to medium business segment. “The acquisition of Pingtel Corp. by Nortel is the next logical step that will further accelerate adoption of the technology and solutions on a global basis. We are very excited to become part of Nortel, the leading provider in the market for unified communications,” says Steinmann.

Nortel will use the software capabilities to further its leadership to deliver unified communications solutions to enterprise customers of all segments. In the near term, Pingtel will bring critical software elements to Nortel’s small-to-medium business (SMB) unified communications solution based on the Nortel Software Communication System 500 (SCS500). These solutions integrate communications like email, IM and conferencing with applications, increasing productivity and streamlining business operations. Pingtel brings intellectual property, R&D capabilities and its senior management to Nortel. The company has been a leading provider of SIP-based Enterprise Communications Systems and a strategic software supplier to Nortel.

Over a year ago Nortel joined the open source community established by SIPfoundry** as an active contributor to the sipXecs open source project (led by Pingtel Corp), providing more than 300 new applications and features to date. The acquisition of Pingtel Corp by Nortel will further accelerate the development of a global open source ecosystem and reinforce Nortel’s direction and leadership in the development of interoperable and open unified communications solutions.

Nortel has been a recognized leader in the small-to-medium business market for over 20 years, providing award-winning solutions to more than 15 million users across 80 countries.
Certain statements in this presentation 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, that 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 business including: significant competition, competitive pricing practice, cautious capital spending by customers as a result of factors including current economic uncertainties, 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; any material, adverse affects on Nortel’s performance if its expectations regarding market demand for particular products prove to be wrong; the sufficiency of recently announced restructuring actions; any negative developments associated with Nortel’s suppliers and contract manufacturing agreements including our reliance on certain suppliers for key optical networking solutions components; potential penalties, damages or cancelled customer contracts from failure to meet delivery and installation deadlines and any defects or errors in Nortel’s current or planned products; fluctuations in foreign currency exchange rates; potential higher operational and financial risks associated with Nortel’s efforts to expand internationally; potential additional valuation allowances for all or a portion of Nortel’s deferred tax assets if market conditions deteriorate or future results of operations are less than expected; a failure to protect Nortel’s intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; any negative effect of a failure to maintain integrity of Nortel’s information systems; changes in regulation of the telecommunications industry or other aspects of the industry; any failure to successfully operate or integrate strategic acquisitions, or failure to consummate or succeed with strategic alliances; Nortel’s potential inability to attract or retain the personnel necessary to achieve its business objectives or to maintain an effective risk management strategy; (ii) risks and uncertainties relating to Nortel’s liquidity, financing arrangements and capital including: 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 senior notes covenants, or on obtaining additional secured debt pursuant to the provisions of indentures governing certain of Nortel’s public debt issues; Nortel’s below investment grade credit rating; 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; or any negative impact on Nortel’s ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and any declines in the market price of Nortel’s publicly traded securities; and (iii) risks and uncertainties relating to Nortel’s prior restatements and related matters including: any negative impact on Nortel and NNL of such restatements; legal judgments, fines, penalties or settlements related to the ongoing criminal investigation of Nortel in the U.S.; or any significant pending or future civil litigation actions not encompassed by Nortel’s class action settlement. For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form10-K and other securities filings with the United States Securities and Exchange Commission. 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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