Nortel CEO Defines Future At Annual Shareholder Meeting

OTTAWA - Speaking today at Nortel’s* [NYSE/TSX: NT] Annual and Special Meeting for Shareholders at its R&D headquarters, President and CEO, Mike Zafirovski highlighted progress against the Company’s six-point plan, discussed the strategy to build a new Nortel, and shared his vision for company’s future.

“Nortel today is different than the Nortel of a year ago,” said Zafirovski. “I see a new Nortel emerging, a Nortel that is focused on the customer. A Nortel that grows and creates value as we help our customers seize the opportunities that exist in the market.”

Zafirovski discussed how through market analysis and customer interaction, Nortel shaped its strategy into three areas of focus: to lead in Transformed Enterprise, to lead in Next-Generation Mobility and Convergence, and to have a significant presence in Services and Solutions.

Zafirovski also noted several customer wins -- such as the Verizon, BT and the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games -- as evidence of Nortel’s growing strength in the market.

“Nortel is on the offense again for the first time in many years,” Zafirovski said. “We are attacking, winning customers, and gaining market momentum.”

Seizing the Opportunities of Hyperconnectivity

In his remarks, Zafirovski discussed the future of communications and how Nortel is prepared to seize the new opportunities emerging in the market.

“The demand for multiple connections, anywhere anytime and from any device is exploding,” said Zafirovski. “It is a phenomenon being driven by the proliferation of handheld devices and the convergence of wired, wireless and IP. Cameras, MP3 Players, security systems, appliances and much more are all demanding to be connected.”

The term for this trend is “Hyperconnectivity”, which encompasses person-to-person communication, person-to-machine and machine-to-machine. Hyperconnectivity is fueling huge increases in bandwidth demand because of the complexity, diversity and integration of new applications and devices using the network.

Underscoring this challenge is the prediction that the amount of information created in 2007 will surpass, for the first time, the storage capacity available, according to global research firm, International Data Corp. The rise of wireless broadband will magnify those trends even further.

“Imagine if every MP3 player was suddenly connected over a wireless broadband connection. The market for mobile devices and mobile data traffic would double,” said Lawrence Surtees, vice-president of communications research at IDC Canada Ltd. of Toronto. “Imagine if every chronically ill patient could receive medical monitoring at home through wireless sensors and PDAs that continually feed vital signs into a broadband-enabled network, more patients could continue to live in their homes, reducing costs and increasing the quality of healthcare provided to an aging population.”

Zafirovski explained that, with Hyperconnectivity, a new era in telecommunication is unfolding and a key inflection point is being reached. “Our strategic direction is focused on making it easy for our customers to capitalize on this inflection point. We believe that Nortel is uniquely positioned in this area. We have the breadth of vision, the experience and the scope of resources needed to deliver on Hyperconnectivity. We have done it in the past. And we will do it again.”

Zafirovski pointed to Nortel’s leadership in wireline and wireless, the Company’s expertise in applications and infrastructure, and its leadership in the enterprise and carrier spaces -- combined with global services capabilities and an ecosystem of the right partners -- as providing Nortel with the right formula for success.

“We will match our knowledge and capabilities with the trends in the industry to bring value to our customers and value to our shareholders,” concluded Zafirovski.