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July 28, 2004

Nortel Networks Awards Certificates of Compatibility; Adds Industry Leaders to Carrier VoIP, Multimedia Developer Program

Program Offers Service Providers Opportunities to Drive Down Costs, Build Value-Rich, Highly Reliable, VoIP Networks

RESEARCH TRIANGLE PARK, N.C. – Building on its commitment to help service providers deliver voice over IP (VoIP) and Multimedia Services to business and consumers, Nortel Networks* [NYSE/TSX: NT] announced that products from AFC, ARRIS, Mediatrix, Ubiquity and Verilink have successfully completed interoperability testing with its Carrier VoIP and Multimedia portfolio. As a result, these companies have each been awarded a Certificate of Compatibility under Nortel Networks Developer Program.

In addition, Nortel Networks also announced the following new program members: Bloophone, Computer Talk Technology, Inc., Entrisphere, i3micro, Interval Research, NewHeights, Polycom, SS8 Networks, Inc. and Terayon. These companies are taking the first step in completing interoperability testing with Nortel Networks suite of hosted VoIP and multimedia solutions.

Solutions selected for Nortel Networks Carrier VoIP and Multimedia segment of the Developer Program are geared to offer service providers opportunities to accelerate time-to-market of revenue-generating VoIP and Multimedia services and to offer them opportunities to achieve maximum flexibility in implementation.

“Our customers around the world value our ongoing emphasis on global interoperability and seamless integration in multi-vendor networks,” said Sue Spradley, president, Wireline Networks, Nortel Networks. “The Developer Program is designed to bring service providers opportunities to drive down costs in VoIP networks while delivering unsurpassed reliability and speeding the delivery of multimedia services.”

Companies awarded Certificates of Compatibility have completed interoperability testing with the following products:
  • AFC’s AccessMAXTM H.248 gateway and Nortel Networks Communication Server (CS) 2000. AFC’s AccessMAX is a platform for delivering multiservice broadband applications like fiber to the premise (FTTP).
  • The ARRIS Cadant C4 Cable Modem Termination System (CMTS) and ARRIS Touchstone Embedded Multimedia Terminal Adapters (E-MTA) and Nortel Networks CS 2000 Compact to enable delivery of VoIP services over cable networks. Nortel Networks and the ARRIS Touchstone products are PacketCableTM and DOCSIStext® 1.1 qualified and the ARRIS Cadant C4 is DOCSIS 2.0 qualified.
  • Mediatrix’s 1102, 1104, 1124 and 1204 access devices and Nortel Networks CS 2000 and MCS 5200. The Mediatrix access devices allow TDM telephony devices to connect to VoIP networks.
  • Ubiquity’s SIP Application Server (SAS) and Nortel Networks Multimedia Communication Server (MCS) 5200 enabling Nortel Networks customers to rapidly develop and deploy new SIP based revenue generating applications.
  • Verilink’s Net EngineTM 8108s and 8508s Integrated Access Devices (IADs) and Nortel Networks CS 2000. Verilink’s Net Engine IADs enable VoIP-based enterprises or residential end-users to connect to existing ADSL and SHDSL.

Details regarding Certificates of Compatibility, including products and tested software releases can be found at www.nortelnetworks.com/prd/dpp/carrier_index.html.

The following new companies in the Developer Program will be working with Nortel Networks to confirm interoperability or provide enhanced services in conjunction with Nortel Networks Carrier Hosted VoIP and Multimedia products:
  • Bloophone’s Bloogate VOIP Integrated Access Devices and Nortel Networks MCS 5200 to allow existing phones to utilize VoIP networks.
  • Computer Talk’s ice3 and Nortel Networks MCS 5200 to provide unified multi-channel contact center communications for enhancing customer care.
  • Entrisphere’s BLM 1500TM and Nortel Networks CS 2000 to provide packet voice and VoIP capabilities via an H.248 interface. The BLM 1500 delivers advanced broadband services over copper and fiber access networks.
  • i3 micro technology Vood VoIP gateways and integrated access devices and Nortel Networks MCS 5200 to provide the combined quality of traditional telephony with the innovation and value-added features of IP and SIP technology.
  • Interval Research and Nortel Networks MCS 5200 to develop enhanced SIP services for cable set top boxes in the cable market
  • NewHeights Desktop AssistantTM Client applications and Nortel Networks MCS 5200 to enable integrated VoIP services with collaboration and contact management services.
  • Polycom’s line of Polycom VSXTM video conferencing systems, its MGCTM voice and video conference bridges and its series of SoundPointtext® IP desktop phones with Nortel Networks MCS 5200 to provide advanced conferencing and video services to end users.
  • SS8 Networks’ ServiceControllerTM 3000 platform and Nortel Networks MCS 5200 to provide sophisticated TDM and IP-based applications including unified communications services in carrier environments.
  • Terayon Communication Systems’ TA 102 a two-line, PacketCableTM based eMTA designed for indoor use, Terayon’s BW 3000 CMTS and Nortel Networks CS 2000 to provide intelligent access solutions in cable networks.

Nortel Networks MCS 5200, part of Nortel Networks multimedia communications portfolio along with the MCS 5100, 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.

For the entire year 2003 and the first quarter of 2004, Nortel Networks ranked #1 in the global markets for VoIP ports shipped and in global softswitch revenue, according to Synergy Research Group** (SRG).

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 or www.nortelnetworks.com/media_center.

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 Nortel Networks independent review and planned restatement of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks 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 Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks 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 Nortel Networks 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 Nortel Networks purchase contracts; the impact of Nortel Networks 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 Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, 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/A and Form 10-K/A 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 and Business Without Boundaries are trademarks of Nortel Networks.

**Synergy Research Group numbers are based on the “Preliminary Carrier Packet Voice Worldwide Market Shares” report published on February 20, 2004.

Contact for Press and Analysts:

Bridget Braxton
Nortel Networks
(972) 685-8813
bbraxton@nortel.com

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