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February 11, 2004

Nortel Networks Creates New Core Interoperability Lab, Announces Interoperability Testing With New Industry Vendors

Interoperability Testing Designed to Increase Flexibility of Circuit-to-Packet Migration, Speeds Deployment of Multimedia Services

RESEARCH TRIANGLE PARK, N.C. – Deepening its commitment to innovation and value for service providers, Nortel Networks* [NYSE/TSX: NT] announced the creation of a new interoperability lab that will serve as one of the Company’s global hubs for interoperability advances with wireline partners and customers, as well as enhance speed to market for developing applications such as voice over Internet protocol (VoIP).

The new lab will be located in Research Triangle Park, N.C., and will allow partners and customers better access for short-term and long-term interoperability projects with Nortel Networks. Expected to be fully in service by April 1, 2004, the RTP lab is designed to accommodate increased interoperability testing between Nortel Networks and key, third-party vendors.

This ‘flagship’ lab for carrier interoperability in RTP will be interconnected with other carrier- and enterprise-focused interoperability test labs in Asia, Canada, and the United States. This multifaceted approach to interoperability testing is expected to allow Nortel Networks to establish core competencies and control, as well as reduce implementation times.

As part of its global interoperability strategy, Nortel Networks also announced new product memberships to its VoIP and multimedia interoperability testing program. These memberships will further Nortel Networks commitment to providing carriers with maximum flexibility in implementing VoIP networks. New members include: Acme Packet™, AFC®, AudioCodes™ [Nasdaq: AUDC], Carrier Access™, Convedia™ Corporation, General Bandwidth®, IP Unity, Netrake, Verilink™ Corporation [NasdaqNM: VRLK], and Westell Technologies, Inc. [Nasdaq: WSTL].

“Interoperability is crucial to our customers’ business, and we realize that successful interoperability requires ongoing effort and determination from vendors like Nortel Networks and members of our VoIP and multimedia interoperability program,” said Sue Spradley, president, Wireline Networks, Nortel Networks.

“By testing interoperability with other vendors, we apply Nortel Networks carrier-grade experience in the lab to facilitate system integration before real-world deployment,” Spradley said. “It is a commitment to quality and reliability that we deliver to all of our customers. Interoperability testing with other industry leaders allows us to help service providers drive top-line revenue opportunities, while making it more cost-effective for service providers to expand their businesses and offer new services.”

Nortel Networks voice over IP and multimedia interoperability testing program is designed to help service providers accelerate time-to-market of packet voice and new session initiation protocol (SIP)-based multimedia services. New program members will focus on enabling interoperability of Nortel Networks Succession* Communication Server (CS) 2000 superclass softswitches and Nortel Networks Multimedia Communication Server (MCS) 5200 with third-party access and trunk gateways, border elements, and SIP service delivery platforms.

“Service providers today want a network comprised of multiple vendors, but interoperability has emerged as one of the biggest challenges they face in creating multi-vendor environments,” said Danny Klein, communications infrastructure analyst, Yankee Group. “As a result, service providers look to vendors like Nortel Networks to create relationships that bridge the gap in multi-vendor networks, ensuring interoperability and seamless integration between solutions.”

Nortel Networks has completed interoperability testing with several leading third-party vendors, and is in the process of or working toward interoperability testing with several others. The newly-announced third-party vendors include:
  • Nortel Networks plans to conduct interoperability testing between Succession CS 2000 and MCS 5200 and Acme Packet’s session border controller, the Net-Net Session Director (SD), which provides key security, service assurance and protocol inter-working functionality for H.323 gatekeeper-to-gatekeeper communications. Acme Packet’s Net-Net SD allows service providers to securely interconnect their core voice over IP networks with a wider range of enterprise IP PBX systems supported by Succession CS 2000.
  • Nortel Networks has completed interoperability testing between AFC’s AccessMAX™ H.248 gateway and Nortel Networks Succession CS 2000 softswitch portfolio to further expand H.248 access options. AFC’s AccessMAX is a platform for delivering multiservice broadband applications and enables carriers to migrate from copper-to-fiber and circuit-to-packet access networks.
  • Nortel Networks is scheduling interoperability testing with AudioCodes, whose MediaPack 104/108/124 products enable line and trunk termination in a customer premise VoIP media gateway. Interoperability testing between Nortel Networks CS 2000 softswitch portfolio and AudioCodes’ MediaPack products will provide service providers with a greater range of H.323 and MGCP-controlled analog VoIP gateways.
  • Nortel Networks plans to schedule interoperability testing between Carrier Access’ Adit 600 Multiservice Delivery Terminal and Nortel Networks Succession CS2000 and MCS 5200. Carrier Access’ Adit 600 Multiservice Delivery Terminal will enable carrier-class Hosted PBX and IP Centrex and data services for small-and medium-sized businesses, further expanding packet gateway options for Succession customers.
  • Convedia Corporation has joined the VoIP and multimedia interoperability testing program and intends to conduct interoperability testing between its CMS-6000 Media Server and Nortel Networks MCS 5200. Convedia’s IP media servers provide voice and video processing for use in a broad range of enhanced services including interactive voice response, multimedia conferencing and unified messaging for wireline, wireless, and cable/MSO service providers.
  • Nortel Networks is planning interoperability testing between its Succession CS 2000 and General Bandwidth’s G6® Packet Telephony Migration Platform, an open, standards-based circuit-to-packet media gateway. The carrier class G6 platform allows service providers and cable operators to cost effectively deliver voice services over existing broadband infrastructures by supporting legacy Class 5 switches (GR-303/V5.2), feature servers (SIP/PRI) and softswitches (PacketCable™ TGCP).
  • Nortel Networks has scheduled interoperability testing between its Succession CS 2000 and IP Unity’s Harmony6000™ application platform. Interoperability testing between these products will enable service providers to deploy flexible new services including voicemail, unified messaging services, audio conferencing, and web conferencing.
  • Netrake has joined the VoIP and multimedia interoperability testing program. Netrake delivers SIP and H.323 gateway and gatekeeper functionality on a single platform. Nortel Networks intends to conduct interoperability testing between Netrake’s nCite™ session controller and Nortel Networks Succession CS 2000. Testing between these products will enable service providers to securely interconnect to multiple networks and support gateway-to-gateway and gateway-to-gatekeeper calls.
  • Nortel Networks is conducting interoperability testing between its Succession CS 2000 softswitch portfolio and Verilink’s Net Engine™ 8108s and 8508s Integrated Access Devices (IADs). Verilink’s Net Engine IADs further expand service providers’ packet gateway options by enabling VoIP-based enterprises or residential end users to connect to existing ADSL and SHDSL equipment.
  • Nortel Networks has completed interoperability testing between its Succession CS 2000 and Westell’s carrier-class InterChange iQ 2030 DPNSS-H.323 VoIP gateway to further expand H.323 trunk gateway options in the UK market. The InterChange iQ 2030 provides a flexible solution for connecting legacy DPNSS PBXs over an IP network, allowing customers to transition their voice and data networks to a VoIP environment.

Nortel Networks MCS 5200, part of Nortel Networks multimedia communications portfolio, is a SIP-based media and applications server. It leverages an open, standards-based architecture and commercially available hardware and software, positioning service providers to offer advanced multimedia and collaboration applications for businesses and consumers.

Nortel Networks Succession CS 2000 superclass softswitch provides call control and delivers a full set of voice services. A superclass softswitch meets all criteria for ‘true’ service provider circuit-to-packet migration, including local, tandem and long distance capability on a single platform; full business and residential telephony service sets; and carrier-grade reliability and scalability.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The Company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

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 sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; continued reductions in spending by our customers; fluctuations in operating results and general industry, economic and market conditions and growth rates; the communication by our auditors of the existence of material weaknesses in internal control; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and our current debt ratings; the ability to meet the financial covenant in our credit facilities; the use of cash collateral to support our normal course business activities; the dependence on our subsidiaries for funding; the impact of our defined benefit plans and our deferred tax assets on our results of operations, cash flows and compliance with our financial covenant; the dependence on new product development and our ability to predict market demand for particular products; the 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 in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of our 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 of our purchase contracts; risks associated with a consolidation of our common shares; the impact of 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; the future success of our strategic alliances; and the adverse resolution of litigation, intellectual property disputes and similar matters. For additional information with respect to certain of these and other factors, see the most recent Form 10-Q and Form 10-K filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks 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 Networks, the Nortel Networks logo, the Globemark, Business Without Boundaries and Succession are trademarks of Nortel Networks.
Use of the terms “partner” and “partnership” does not imply a legal partnership relationship between Nortel Networks and any other party.

Contact for Press and Analysts:

Christie Blake
Nortel Networks
(978) 288-8439
christbl@nortel.com

Carrie Kasten
Nortel Networks
+44 1628 43 5358
ckasten@nortel.com

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