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March 20, 2001

Nortel Networks Announces Availability of Industry’s First MEMS-Based Tunable Filters

Patented Technology Adds New Levels of Flexibility to Smart Optical Networks

ANAHEIM, Calif. – Nortel Networks* [NYSE/TSE: NT]announced general availability of the industry’s first MEMS (Micro Electro-Mechanical System)-based tunable filters, strategic optical components which add new levels of flexibility to optical networks and facilitate the delivery of managed wavelength services.

“Nortel Networks is accelerating the evolution of the smart optical network,” said Barbara Callaghan, president, High-Performance Optical Component Solutions, Nortel Networks. “The tunable filters are key, leading-edge optical components designed to increase the flexibility, reliability and profitability of the high-performance Internet.”

Nortel Networks tunable filters enable service providers to offer remotely managed wavelength services by distributing wavelengths – or colors of light – so businesses can obtain and control the bandwidth they want, when they want it. Currently, service providers have to send skilled field technicians to physically switch wavelengths, a costly and time-consuming process.

The tunable filters are based on the same surface micro-machined MEMS technology as Nortel Networks tunable laser. The technology employs two microscopic mirrors – one a curved mirror that is deposited on a tiny, precision membrane, much like a trampoline. As the membrane is driven up and down by a change in electrostatic force, the distance between the two mirrors changes, selecting a wavelength.

“Unlike many of the more recognized MEMS structures, this technology employs a membrane of a special material and a curved mirror structure that allows an order of magnitude overall optical performance improvement,” said Parviz Tayebati, president and founder of Coretek, a Nortel Networks subsidiary. “Our MEMs device is the first ever to be qualified for telecommunications applications, marking a major milestone in the optical MEMs industry.”

“This is just one part of a Nortel Networks tunable solution that will also include tunable lasers, transmitters, channel monitors, gain monitors, gain flattening filters and variable optical attenuators,” Callaghan said. “Nortel Networks next generation tunable components will enable service providers to build a more flexible, agile network.”

The tunable filters have been optimized for several applications in the all-optical network. The narrowest tunable filter provides industry-leading signal-to-noise ratio performance for DWDM channel monitoring. The low insertion loss of the broader filter is ideally suited for the drop and pass-through channel requirements of a reconfigurable optical network, while the optimized power handling of the widest filter is ideal for the adjustable ASE suppression application that will improve the transmission link performance.

Nortel Networks tunable filter is qualified to Telcordia GR1221 standards and is shipping from stock today.

Nortel Networks High-Performance Optical Component Solutions business is one of the largest and fastest growing global optical components businesses globally. The business is a world leader in the design, development and manufacture of high-value modules for the Optical Internet, including those for 10 and 40 gigabits per second systems. It has established industry leadership and competitive differentiation by translating the art of optical invention and design into volume manufacturing of components and modules that are at the heart of the high-performance Internet and the devices that connect to it. It has employees located in Harlow and Paignton in the United Kingdom; Ottawa, Ontario; Boston, Mass.; and Sydney, Australia.

Nortel Networks is a global Internet and communications leader with capabilities spanning Optical, Wireless, Local, Personal Internet and eBusiness. The Company had 2000 U.S. GAAP revenues of US$30.3 billion and serves carrier, service provider and enterprise customers globally. Today, Nortel Networks is creating a high-performance Internet that is more reliable and faster than ever before. It is redefining the economics and quality of networking and the Internet, promising a new era of collaboration, communications and commerce. Visit us at www.nortelnetworks.com.

*Nortel Networks, the Nortel Networks logo and the Globemark are trademarks of Nortel Networks.

Contact for Press and Analysts:

Ann Fuller
Nortel Networks
613-768-1208
afuller@nortel.com

Ben Roome
Nortel Networks
44 20 7529 3036
benroome@nortel.com

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