Nortel And Qualcomm Lay Foundation For Enhanced Dual-Mode Phone Service Out-Of-The-Box

TORONTO - Nortel* [NYSE/TSX: NT] has successfully tested a solution with Qualcomm that will improve the mobile phone experience for users by allowing them to continue conversations uninterrupted and avoid additional roaming charges when a caller is moving between different wireless networks.

The completion of testing between Nortel’s IMS-based Voice Call Continuity (VCC) network solution and the Qualcomm chipset solution that uses their IMS/VCC device client is a major step towards the availability of out-of-the box VCC-enabled mobile phones. VCC helps decrease mobile phone charges by seamlessly switching voice calls, without interruptions, between WiFi and cellular networks. Airtime and long distance charges do not apply when the user roams into areas of WiFi coverage - which can be in the home, office or some public retail locations.

Nortel and Qualcomm’s pre-validated solutions allow dual-mode mobile phones to be VCC-ready upon purchase without any additional software downloads or service provider configuration, which is expected to help accelerate broader use of the technology.

“Fixed Mobile Convergence (FMC) with the ability to seamlessly switch between cellular and WiFi networks is a critical requirement for many carriers,” said Akshay Sharma, research director, Gartner, Carrier Network Infrastructure. “IMS VCC requires both a network-based component and a handset-based solution. Specific handset offerings with advanced client software have proven difficult for operators to maintain. Having VCC-enabled phones will accelerate the up-take and deployment of the technology in the market.”

As an IMS-based application, VCC moves beyond traditional cellular solutions by enabling service providers to offer innovative multimedia services on mobile phones like network-based real-time, multi-player gaming, enterprise service integration and interactive blogging.

“Because Nortel’s VCC is based on IMS, it will allow operators to deploy more multimedia services compared to other FMC solutions,” said Alf Decardenas, general manager, Carrier Multimedia Networks, Nortel. “Also, Nortel’s VCC solution supports seamless voice calling across a wide range of next-generation technologies, as well as Femto cellular access points that are able to connect to the network using residential DSL or cable broadband connections. Nortel is a leading contributor to VCC standards and our successful completion of testing with Qualcomm illustrates that we are committed to deploying commercial VCC solutions in the market, making them available to service providers within their current networks or as they evolve to 4G solutions such as WiMAX, UMB and LTE.”

“Nortel’s successful testing with our chipset solution is another step towards enabling operators to offer new FMC solutions,” said Steve Mollenkopf, senior vice president of product management for Qualcomm CDMA Technologies. “Qualcomm’s IMS/VCC device client solution provides efficient power management, optimizations in the VoIP client software, and other optimizations that help deliver a seamless user experience that can now be made available across a wide range of handsets around the globe in the very near future.”

Test sessions were conducted with a Qualcomm test handset using live cellular coverage, rather than a simulation. Testing included authentication, calls on cellular/WiFi, in-call handover using manual and automatic triggers and a variety of error cases. Both Nortel and Qualcomm have implemented the VCC standards defined by the Third Generation Partnership Project (3GPP)**, the global standard for 3G mobile phone systems.

Testing was conducted using Qualcomm’s IMS/VCC device client solution on a Mobile Station Modem (MSM) chipset powering a test handset together with Nortel’s IMS VCC network solution in Nortel’s Ottawa research and development labs. The Nortel VCC network solution is expected to be commercially available from Nortel in the first quarter of 2008. VCC-ready devices are expected to be available from Qualcomm in the market mid 2008.

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.