Nortel to Provide Communications for First International High-Speed Railway Line in Spain

GSM-R Allows Full Interoperability Between French, Spanish Railway Networks

OCTOBER 04, 2006 - Madrid, Spain - TP Ferro, a Spanish and French railway consortium, will use railway communications technology from Nortel* [NYSE/TSX: NT] for the new 44 km high-speed Figueres - Perpignan line currently being built between Spain and France.

The GSM-R network will also support vital uninterrupted communications throughout a sophisticated eight kilometer tunnel across the Pyrenees, providing a new rail alternative for passengers and merchandise.

Expected to open in early 2009, the new Figueres-Perpignan line will be part of the trans-European transport network initiative promoted by the European Union. It will be integrated into the Southwest Europe High-Speed Train Axis. As part of its common transport policy, the EU has adopted legislation to pave the way for gradual establishment of an integrated European railway area, both legally and technically. This involves the development and implementation of Technical Specifications for Interoperability including communications for which GSM-R plays an important role.

TP FERRO is a company created by the Spanish ACS and the French Eiffage, both leaders in the infrastructures area in Europe, for the construction, operation and maintenance of this new high speed railroad line mixed traffic between Figueres and Perpignan. IFP is the consortium integrated by construction contractors Spanish Cobra and French Forclum responsible for the construction and engineering work. Nortel is providing the GSM-R network and engineering, installation, integration, project and consultancy services for IFP.

“Nortel’s GSM-R solution allows the complete integration of vital rail communications between the GSM-R networks of the French Réseau Ferré de France (RFF) and the Spanish Administrador de Infraestructuras Ferroviarias (ADIF),” said Victor Sanz, project director, IFP Figueres-Perpignan. “Interoperability of communications is a key element of the trans-European rail system that is designed to reduce travel times across international borders significantly for all kind of railway users.”

“GSM-R provides railway operators and infrastructure owners with improved voice and data services tailored for railway operations, supporting high-speed train operation of up to 500 kilometers per hour,” said Michel Clement, president Southern Europe and Africa, Nortel. “GSM-R improves operational communication and helps to advance staff performance and employee safety through safe and uninterrupted communication in day-to-day operation.”

Nortel is a world leader in GSM-R technology and has been selected to deploy GSM-R networks in three continents and ten countries, including national deployments for the three largest railway operations in Europe - RFF in France, Network Rail in Great Britain and Deutsche Bahn in Germany. Nortel has also deployed GSM-R networks for railway lines between Bilbao and Santander for Spain’s Adif.

Nortel has been a pioneer in the GSM-R standards process since 1992, and works with Union Internationale des Chemins de Fer (UIC) and the Europe Telecommunications Standards Institute (ETSI) on standards improvements. Nortel supplied equipment for the initial Mobile Radio for Railways Networks in Europe (MORANE) trial and was a major contributor to the European Integrated Railway Radio Enhanced Network (EIRENE) GSM-R standard.

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. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today’s 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.

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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; any negative impact on Nortel’s ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and further declines in the market price of Nortel’s publicly traded securities, or any future share consolidation resulting in a lower total market capitalization or adverse effect on the liquidity of Nortel’s common shares. For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form10-K/A, Quarterly Report 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.

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