China Telecom Selects Nortel to Deploy CDMA Wireless Networks in Seven Provinces

Next-Generation Solution Enhances Today’s Services and Smooths Future Evolution

BEIJING - Nortel* [NYSE/TSX: NT ], has been selected by China Telecommunications Corporation ( CTC **) as a key vendor in the evolution of its CDMA network in seven provinces. CTC is one of China’s largest state-owned mobile network operators.

Powered by Nortel’s CDMA solution , CTC’s expanded network will provide superior voice service and mobile multimedia applications - including web browsing, e-mail, instant messaging, picture messaging, gaming and advanced data services - to a rapidly expanding customer base with enhanced user experience.

Nortel’s innovative CDMA Enhanced 1X technology will also help CTC protect its existing network investment by delivering operational cost savings through the re-use of existing software and hardware even as the network is upgraded. In addition, Nortel provides a seamless and cost-effective evolution path enabling CTC to easily evolve its network and achieve a competitive edge.

The CDMA network upgrade will ensure CTC provides the highest level of service with exceptional call quality and clarity with high-bandwidth wireless capabilities to support such applications as video streaming, music downloads, and multimedia that allow customers to communicate and collaborate more effectively.

“CDMA is at the heart of networks deployed by some of the world’s largest operators, providing voice, data, and video to millions of consumers,” said Richard Lowe, president Carrier Networks, Nortel. “We’re delighted to be working with CTC as it rolls out its next-generation network and look forward to a long, successful relationship. In China, Nortel has over 35 years of experience helping operators deliver exceptional service quality and has made China a strategic focus with significant manufacturing, R&D and service capabilities.”

In an IDC study sponsored by Nortel earlier in 2008,*** researchers found that of 17 major countries around the world, China scored highest for the level of Hyperconnectivity of its knowledge workers. The score was based on the combination of multiple devices and applications used every day to access the information they need for work and leisure. Nortel is fully committed to providing CTC with real competitive differentiation for China’s increasingly hyperconnected consumers.

As part of the expansions and modernization of the networks, Nortel will supply Enhanced Base Station Controllers and Base Stations designed and built with unique innovations in Power Amplifiers and Transceivers that deliver significant reductions in power consumption, creating a more cost-effective and environmentally-friendly network, while giving subscribers high-quality voice and multimedia services.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel’s technologies are designed to help eliminate today’s barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. For more information, visit Nortel on the Web at www.nortel.com . For the latest Nortel news, visit www.nortel.com/news .

Certain statements in this press release 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, which are difficult to predict and the actual outcome may be materially different from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form10-K, Quarterly Reports 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.

*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.
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*** IDC White Paper sponsored by Nortel, The Hyperconnected: Here They Come! - May 2008