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Hong Kong Broadband Network Expands Voice, Video, Multimedia IP Services


Enables Advanced Multimedia Services for Subscribers Around the Globe

NOVEMBER 10, 2005, HONG KONG - Hong Kong Broadband Network Limited (HKBN), the cityís largest alternative residential voice and broadband service provider, is expanding its VoIP telephony and multimedia services to increase capacity by 1 million subscribers through a major upgrade of its VoIP network supplied by Nortel* [NYSE/TSX: NT].

To launch its 2b Broadband phone service, HKBN deployed a powerful combination of solutions including Nortelís Multimedia Communication Server (MCS) 5200, a converged multimedia platform that enables enhanced communications regardless of location, access type or media. HKBN also deployed Nortel Communication Server (CS) 2000-Compact, making it possible for voice, video and multimedia services to be delivered on a single packetized network, providing more efficient and cost-effective use of its network.

HKBNís 2b Broadband subscribers will now be able to enjoy VoIP with advanced multimedia services such as secure instant messaging, video calling and broadband access rolled out to subscribers in Hong Kong, North America, Europe, Southeast Asia and Australia.

ďIn just five years we have successfully established HKBN as a major force in Hong Kongís highly competitive telephony and broadband market,Ē said Ricky Wong, chairman, Hong Kong Broadband Network Limited. ďWe offer value and bandwidth options that cannot be matched by older, traditional telephone networks, and this major network expansion by Nortel is expected to play a key role in our ability to attract new subscribers in local and global markets and further reinforce our market leadership.Ē

ďNortelís VoIP and multimedia solution will allow HKBN to offer advanced voice, video and broadband service bundles to increasing numbers of users in Hong Kong and abroad,Ē said David Wong, managing director, Hong Kong, Nortel. ďHKBN operates one of the largest Nortel multimedia communications platforms in the world. As competition for subscribers intensifies, Nortel will continue to support HKBN with solutions designed to deliver carrier-grade performance and reliability at significantly reduced operational costs.Ē

Nortel MCS 5200 is based on Session Initiation Protocol (SIP), an industry standard designed to deliver a variety of multimedia services to enhance the human experience, such as desktop video calling, voice call management, instant messaging, collaboration tools and personalization services.

Nortelís CS 2000-Compact superclass softswitch enables service providers to deliver the full suite of traditional voice services to business and residential customers on a packetized network with voice and data traffic sharing the same communications lines to provide more efficient and cost-effective use of existing transmission capacity.

Nortel ranked number one in the global markets for service provider softswitches and gateways for the first half of 2005 and the entire year of 2004, according to Synergy Research Group. Nortel is providing VoIP and multimedia solutions to many of the worldís leading service providers, including Bell Canada, Rogers Communications, SaskTel, Telus, Verizon, Sprint, MCI, British Telecom, Cable & Wireless, Hong Kong Broadband and CompleTel in France.

About City Telecom / Hong Kong Broadband Network

Established in 1992, City Telecom (H.K.) Limited (SEHK: 1137, NASDAQ: CTEL) provides integrated telecommunications services in Hong Kong. City Telecomís wholly-owned subsidiary, Hong Kong Broadband Network Limited (HKBN), is in the process of expanding its Metro Ethernet from 1.2 million to 1.8 million homes pass, reaching 80% of Hong Kongís total population. HKBN has achieved an aggregate voice, broadband (symmetric 1000Mbps, 100Mbps and 10Mbps), IP-TV and corporate data service base in excess of 600,000 subscriptions. HKBN is now the largest alternative operator for residential voice and broadband services in Hong Kong. Additional information on City Telecom can be found at**.

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 worldís 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 worldís greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at For the latest Nortel news, visit

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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