Nortel Enhances Communications Solutions for Enterprises to Provide Best Value; Benefits Can Include Reduced Costs, Simpler Network Management

SANTA CLARA, Calif.--April 11, 2005--Nortel (NYSE:NT) (TSX:NT) has introduced an enhanced set of solutions for enterprises designed to help ignite and power global commerce by providing what we believe is one of the best value models available for delivering combined voice, video, data and multimedia communications services.


By converging multiple voice and data networks into one, these solutions can position enterprises to lower deployment and operating costs by as much as 50 percent based on Nortel estimates - while simplifying administration and management of sophisticated networks.

“Converged networks offer enterprises the ability to deploy a fully-functional communications infrastructure that is less expensive to deploy, operate and maintain, and lays the groundwork for next generation applications,” said Johna Till Johnson, president, Nemertes Research. “Leading-edge companies who participated in our most recent benchmark on Convergence overwhelmingly told us that Nortel’s solution is among the most cost-effective to deploy and operate.”

Customers around the world are benefiting from Nortel’s converged network solutions, which are designed to meet current communications needs with lowered total cost of ownership while accommodating Internet Protocol (IP) multimedia capabilities. These customers include CSC Australia; the City of Richardson, Texas; Global Materials Technologies, Inc.; Worcester Polytechnic Institute; Care New England; and China’s Hubei Power Company.

IP multimedia solutions from Nortel provide increased network application performance with reduced costs by allowing enterprises to build on current telephony infrastructure and expand their networks with IP multimedia capabilities as needed. New services allow enterprises to improve collaboration both internally and externally via the most convenient and effective method - phone, e-mail, instant messaging or video conferencing, used individually or in combination.

The City of Richardson, Texas, has implemented a state-of-the-art IP multimedia network with Nortel solutions that allows city officials to work together more effectively to serve the citizens of Richardson. With ’anytime, anywhere’ mobility, for example, officials are now able to communicate efficiently outside the office environment, providing greater exposure to the community while protecting public funds.

The City of Richardson estimates that the network will provide savings of as much as US$250,000 per year, including US$120,000 in telecommunications company charges and US$130,000 in IT staff hiring no longer required. By transitioning from existing Nortel equipment, the City of Richardson also avoided purchases of more than US$50,000 in new servers.

As a result, the City of Richardson’s Information Services department has been able to reduce its annual budget by nearly eight percent while increasing the performance of its network.

“Nortel helped us reach our goals by supplying a cost-effective solution that does not require additional expertise or people,” said Steve Graves, chief information officer, City of Richardson.

Nortel’s enterprise converged network solutions have helped CSC Australia exceed its expectations for total cost of ownership with first-year savings of approximately US$767,000 (AU$1 million).

“We initially projected savings of 5.5 percent, but in reality we are achieving considerably more than this in areas such as long-distance toll costs between our Perth and Sydney offices and ’moves-adds-changes’ activity,” said Iain McGregor, director, CSC Network Engineering Services. “In fact, we’ve experienced somewhere between 10 and 15 percent savings and the payback was less than two months.”

Global Materials Technologies, Inc., is a small company with worldwide operations that manufactures steel products. The company credits its IP multimedia communications network with enabling greater focus on its core business to maintain a global presence and to operate like an enterprise of much greater size.

“Even though we are a growing company, our telecommunications budget for this year is lower than it was for last year,” said Ed Jones, vice president, Information Systems, Global Materials Technology. “I have decreased my cost even though I have increased my usage. Though the numbers vary, as a direct result of installing Nortel’s IP telephony solution I am saving 12 to 18 percent in telecommunications costs.”

“It’s more than just cost savings here,” Jones said. “Its being able to call when you want to, not having to worry about calling when the rates are high, not having to worry about how long we’ve been on the phone. It allows us to do much more than just save costs.”

“This is the latest step in our continuing journey to enable our customers to accomplish more with less through network solutions designed to increase performance, reliability, scalability and security while enabling a lower total cost of ownership,” said Malcolm Collins, president, Enterprise Networks, Nortel. “Our new solutions allow enterprises to focus on building their businesses while driving increased revenue opportunities with simplified networks - tuned to provide IP multimedia capabilities - that are faster to deploy and less complex to manage. These solutions build on the evolutionary stages we’ve taken to make the Virtual Enterprise a reality, allowing enterprises to have control over when, where, and how their employees can collaborate, no matter where they are or how they access the network.”

Nortel’s new enhanced solutions are supported with new products, including the augmented Nortel Enterprise Network and Service Management suite and Resilient Terabit Cluster. These new platforms help position enterprise customers to drive increased productivity and to support their business cases more effectively.

The Resilient Terabit Cluster delivers increased performance and scalability in a platform engineered to support Web applications, converged networks and other high-performance applications that can increase productivity, reduce costs and ease system and process integration. The Resilient Terabit Cluster is based on Nortel’s Ethernet Routing Switch 8600 Release 4.0 and delivers Gigabit Ethernet and 10 Gigabit Ethernet performance and industry-proven quality of service (QoS) to accommodate the next generation of IP multimedia applications.

Existing customers are able to maximize their Ethernet Routing Switch 8600 investment by easily transitioning to the new capabilities of the Resilient Terabit Cluster, eliminating up-front migration costs.

“As an engineering school in a particularly competitive region, our ability to serve our students, faculty and staff is predicated on our ability to communicate at all times via a variety of methods,” said Sean O’Connor, director, Network Operations and Security, Worcester Polytechnic Institute. “Working with Nortel, we have deployed the Resilient Terabit Solution to enable our campus to meet the needs of students, faculty and staff, by sharing bandwidth-intensive applications like video conferencing capabilities for distance learning. Providing these capabilities with a secure solution that offers leading reliability with investment protection helps us maintain our competitive edge.”

“As a provider of healthcare services, network uptime and resiliency are the most critical networking issues for us,” said Howard Rubin, director, technical services, Care New England. “Nortel’s Ethernet Routing Switch 8600 platform has proven itself with the utmost availability. We have a large amount of critical, real-time patient information traveling across our network at any given moment. We cannot risk compromising any of these transactions. All of our efforts are focused on providing the most comprehensive care to our patients and we welcome any capability that allows us to focus on our goals. Nortel’s unique network resiliency gives us the critical uptime we require.”

Nortel’s Enterprise and Service Management Solutions, such as Proactive Voice Quality Management and Enterprise Subscriber Manager, allow customers to deploy converged networks designed to promote quality end-user experiences while lowering total cost of ownership.

The Proactive Voice Quality Management solution was developed in concert with NetIQ and is designed to provide network operators with the management capabilities to measure and deliver IP Telephony and multimedia solutions that minimize administration requirements and improve performance. In addition, Nortel resells NetIQ’s VoIP management solutions, which include Vivinet Assessor, Vivinet Diagnostics and AppManager for VoIP, as part of the new Nortel Proactive Voice Quality Management solution.

Nortel provides industry-leading convergence solutions based on the company’s rich heritage in voice and data communications. The company has deployed more than 50 million enterprise telephony lines in addition to 50 million Ethernet ports. Nortel’s IP multimedia solutions serve customers of all sizes in all industries.

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; the findings of Nortel’s independent review and implementation of recommended remedial measures; the outcome of the 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 controls over financial reporting; the impact of Nortel’s and NNL’s failure to timely file their financial statements and related periodic reports, including breach of its support facility and public debt obligations and Nortel’s inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (“SEC”); ongoing SEC reviews, which may result in changes to our public filings; the potential delisting or suspension of Nortel’s and NNL’s publicly traded securities; 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, 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; 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 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; stock market volatility generally and as a result of acceleration of the settlement date or early settlement, which is currently not available, of Nortel’s forward purchase contracts; 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; and the future success of Nortel’s strategic alliances.

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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