Nortel Signs 2G/3G Deal with Cingular Wireless
Technology to Reduce Costs and Boost Network Capacity
FEBRUARY 14, 2006, DALLAS - Cingular Wireless, the nationís largest wireless provider, has signed a three-year contract with Nortel* [NYSE/TSX: NT] to provide wireless network services and equipment.
Nortelís GSM and UMTS wireless voice core technology will support Cingularís rapid network expansion and subscriber growth and help enable Cingular to reduce costs, increase network reliability and improve the quality of service for subscribers through the use of a more cost efficient, packet-switched core network.
ďThis contract represents a new footprint for Nortel and is a testament to our leadership in voice over packet technology and 3G wireless broadband solutions,Ē said Mike Zafirovski, president and CEO, Nortel. ďWeíre applying our networking expertise from wireless and wireline packet voice technology to help make operators like Cingular more successful.Ē
ďWeíre glad to extend our relationship with Nortel as we continue to enhance our core network and expand our 3G offering,Ē said Ed Reynolds, president of network services for Cingular Wireless.
Under the new agreement, Nortel will deploy its 2G/3G 3GPP Release 4 compliant MSC (Mobile Switching Center) Server and Media Gateway products to support Cingularís UMTS/HSDPA network deployment. These products are compliant with 3GPP Bearer Independent Core Network standards. Nortelís R4 technology will help provide a significant increase in call handling capacity - up to 300% according to Nortel estimates.
Nortel has already deployed more than two million ports of its MSC solution to support Cingularís national 2G/GSM network in major markets across the United States. According to Nortel estimates, this is believed to be the industryís largest in-service R4 core network installation to date. Nortel has been a supplier of wireless infrastructure equipment in the Cingular Wireless network since 1995.
Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries. Nortelís innovation in wireless data networks coupled with its enterprise strategy of delivering seamless voice, data, multimedia and converged IP-enabled solutions will assist businesses and consumers to enjoy a more seamless, mobile broadband experience.
Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the worldís most critical information. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate todayís barriers to efficiency, speed and performance by simplifying networks and connecting people with information. 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 Nortelís restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortelís results of operations, financial condition and liquidity, and any related potential dilution of Nortelís common shares; the findings of Nortelís 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 Nortelís previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortelís internal control over financial reporting and the conclusion of Nortelís management and independent auditor that Nortelís internal control over financial reporting is ineffective, which could continue to impact Nortelís ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortelís and NNLís failure to timely file their financial statements and related periodic reports, including Nortelís 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 Nortelís former CEO, CFO and Controller in April 2004; the sufficiency of Nortelís 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 Nortelís customers; increased consolidation among Nortelís customers and the loss of customers in certain markets; fluctuations in Nortelís operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortelís cash flow, level of outstanding debt and current debt ratings; Nortelís monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortelís ability to recruit and retain qualified employees; the use of cash collateral to support Nortelís normal course business activities; the dependence on Nortelís subsidiaries for funding; the impact of Nortelís defined benefit plans and deferred tax assets on results of operations and Nortelís cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortelís dependence on new product development and its ability to predict market demand for particular products; Nortelís 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 Nortelís customers and the impact of customer financing and commitments; general stock market volatility; negative developments associated with Nortelís 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 Nortelís 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 Nortelís 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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