Nortel Advances Ethernet for Coming Wave of Video Services

Toronto, Canada (ots/PRNewswire) -

- Unveils Metro Ethernet Innovations for Video, 3G Wireless and
Business Services

Following its recent announcement of a new business targeted at
Metro Ethernet Networks, Nortel(x) (NYSE: NT; TSX: NT) today
introduced innovations to; meet the growing demand for high-bandwidth
video and data services in service provider metropolitan networks.
Nortel's innovations enable service providers to confidently use
Ethernet - once a technology used only for PC connectivity in the
LAN - as the means for delivering mission critical high-bandwidth
services like IPTV, mobile video, and business services.

"Nortel is delivering on its recently announced Metro Ethernet
Networks focus, offering innovative solutions that are designed to
give Ethernet the determinism, scale, management and service
convergence capabilities that are needed to address the growing video
transport market," said Philippe Morin, president, Metro Ethernet
Networks, Nortel. "As new video services become more pervasive, Metro
Ethernet gives service providers the capability to satisfy the
dramatically increasing requirements for bandwidth and strict
performance in metropolitan networks while still maintaining the
cost-effectiveness and simplicity that makes Ethernet attractive."

"The growth of video services, from high-definition broadcast to
video on demand, across cable, DSL, fiber, and mobile networks, is
driving unprecedented demand for bandwidth and Ethernet transport
equipment across metro area networks," said Jeff Heynen, directing
analyst, Broadband and IPTV, Infonetics Research. "Ethernet is being
increasingly relied on for video traffic because of its cost
effectiveness, ability to scale and its flexible QoS models for the
increasing variety of video service offerings."

Nortel's Metro Ethernet Networks portfolio is focused on making
Ethernet more capable for service provider deployments where
deterministic service delivery with guaranteed quality of service and
carrier-grade reliability is required. Nortel's solutions also give
Ethernet the ability to scale to millions of users while ensuring the
network is easy to operate and manage with a comprehensive set of
management tools. Specifically:

- Nortel is incorporating the deterministic, carrier-grade connection
management characteristics of SONET/ SDH into Ethernet with its
innovative Provider Backbone Transport (PBT) technology. PBT is now
available on the Metro Ethernet Routing Switch (MERS) 8600, with
development underway to integrate PBT into the Optical Multiservice
Edge (OME) 6500 and other Ethernet-ready platforms. Nortel developed
PBT as a reliable, simple, scalable and cost-effective technology
enabling Ethernet-based Metro Networks to work seamlessly with service
providers' existing MPLS core networks.
- Nortel was a driving force in bringing massive scalability (up to
millions of service instances per metro) to Ethernet through the
standardization of Provider Backbone Bridging (IEEE 802.1ah or
Mac-in-Mac). An early implementation of PBB has been available on
Nortel's Metro Ethernet portfolio for several years, and a fully
standardized version will be delivered later this year as the standard
is ratified.
- Nortel is enabling service convergence on its Metro Ethernet solutions
with the availability of integrated, standards-compliant resilient
packet ring (RPR) technology into its flagship OME 6500 optical
platform. RPR capabilities on the OME 6500 support multiple Ethernet
rings of up to 10Gbps and the ability to provision up to eight classes
of service on a per customer and per application basis. This helps
ensure real-time traffic like video is prioritized, and enables
service providers to offer differentiated service level agreements to
their business services customers.
- Nortel is supporting the development of new Ethernet operations,
administration and maintenance (OAM) standards to dramatically enhance
the manageability of Ethernet. These standards are being implemented
across our Metro Ethernet portfolio to deliver comprehensive fault
detection, notification, isolation and troubleshooting mechanisms, in
addition to standardized performance monitoring tools.
- In addition, Nortel has developed several new Ethernet enhancements
that improve the scalability and performance of its Metro Ethernet
portfolio. This includes a new 10 GE Ultra card on the Nortel Optical
Metro 5200 that enables the transport of 10 Gigabit Ethernet up to
175km without the need for regeneration or dispersion compensation, a
59% improvement over previous capabilities.

Nortel is committed to building on its market leadership in the
growing Metro Ethernet market through continued investment in the
business and support of open standardization, certification and
interoperability testing efforts. Six products in Nortel's Metro
Ethernet Networks portfolio have been awarded Ethernet certifications
by the Metro Ethernet Forum. Nortel is an industry leader in
delivering carrier-grade Ethernet over optical networks, and has
shipped 175,000 optical Ethernet ports worldwide. Nortel was the
first vendor to commercially deploy RPR-based technology in 1999, and
has since shipped over 44,000 RPR ports to customers around the
world. Nortel was No. 1 globally in total optical revenues for the
first quarter of 2006 according to The Dell'Oro Group.

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 world's most critical
information. Our next-generation technologies, for both service
providers and enterprises, span access and core networks, support
multimedia and business-critical applications, and help eliminate
today's barriers to efficiency, speed and performance by simplifying
networks and connecting people with information. Nortel does business
in more than 150 countries. 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", "plans", "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. Further, actual
results or events could differ materially from those contemplated in
forward-looking statements as a result of the following (i) risks and
uncertainties relating to Nortel's restatements and related matters
including: Nortel's most recent restatement and two previous
restatements of its financial statements and related events; the
negative impact on Nortel and NNL of their most recent restatement
and delay in filing their financial statements and related periodic
reports; legal judgments, fines, penalties or settlements, or any
substantial regulatory fines or other penalties or sanctions, related
to the ongoing regulatory and criminal investigations of Nortel in
the U.S. and Canada; any significant pending civil litigation actions
not encompassed by Nortel's proposed class action settlement; any
substantial cash payment and/or significant dilution of Nortel's
existing equity positions resulting from the finalization and
approval of its proposed class action settlement, or if such proposed
class action settlement is not finalized, any larger settlements or
awards of damages in respect of such class actions; any unsuccessful
remediation of Nortel's material weaknesses in internal control over
financial reporting resulting in an inability to report Nortel's
results of operations and financial condition accurately and in a
timely manner; the time required to implement Nortel's remedial
measures; Nortel's inability to access, in its current form, its
shelf registration filed with the United States Securities and
Exchange Commission (SEC), and Nortel's below investment grade credit
rating and any further adverse effect on its credit rating due to
Nortel's restatements of its financial statements; any adverse affect
on Nortel's business and market price of its publicly traded
securities arising from continuing negative publicity related to
Nortel's restatements; Nortel's potential inability to attract or
retain the personnel necessary to achieve its business objectives;
any breach by Nortel of the continued listing requirements of the
NYSE or TSX causing the NYSE and/or the TSX to commence suspension or
delisting procedures; (ii) risks and uncertainties relating to
Nortel's business including: yearly and quarterly fluctuations of
Nortel's operating results; reduced demand and pricing pressures for
its products due to global economic conditions, significant
competition, competitive pricing practice, cautious capital spending
by customers, increased industry consolidation, rapidly changing
technologies, evolving industry standards, frequent new product
introductions and short product life cycles, and other trends and
industry characteristics affecting the telecommunications industry;
any material and adverse affects on Nortel's performance if its
expectations regarding market demand for particular products prove to
be wrong or because of certain barriers in its efforts to expand
internationally; any reduction in Nortel's operating results and any
related volatility in the market price of its publicly traded
securities arising from any decline in its gross margin, or
fluctuations in foreign currency exchange rates; any negative
developments associated with Nortel's supply contract and contract
manufacturing agreements including as a result of using a sole
supplier for key optical networking solutions components, and any
defects or errors in Nortel's current or planned products; any
negative impact to Nortel of its failure to achieve its business
transformation objectives; additional valuation allowances for all or
a portion of its deferred tax assets; Nortel's failure to protect its
intellectual property rights, or any adverse judgments or settlements
arising out of disputes regarding intellectual property; changes in
regulation of the Internet and/or other aspects of the industry;
Nortel's failure to successfully operate or integrate its strategic
acquisitions, or failure to consummate or succeed with its strategic
alliances; any negative effect of Nortel's failure to evolve
adequately its financial and managerial control and reporting systems
and processes, manage and grow its business, or create an effective
risk management strategy; and (iii) risks and uncertainties relating
to Nortel's liquidity, financing arrangements and capital including:
the impact of Nortel's most recent restatement and two previous
restatements of its financial statements; any inability of Nortel to
manage cash flow fluctuations to fund working capital requirements or
achieve its business objectives in a timely manner or obtain
additional sources of funding; high levels of debt, limitations on
Nortel capitalizing on business opportunities because of credit
facility covenants, or on obtaining additional secured debt pursuant
to the provisions of indentures governing certain of Nortel's public
debt issues and the provisions of its credit facilities; any increase
of restricted cash requirements for Nortel if it is unable to secure
alternative support for obligations arising from certain normal
course business activities, or any inability of Nortel's subsidiaries
to provide it with sufficient funding; any negative effect to Nortel
of the need to make larger defined benefit plans contributions in the
future or exposure to customer credit risks or inability of customers
to fulfill payment obligations under customer financing arrangements;
any negative impact on Nortel's ability to make future acquisitions,
raise capital, issue debt and retain employees arising from stock
price volatility and further declines in the market price of Nortel's
publicly traded securities, or any future share consolidation
resulting in a lower total market capitalization or adverse effect on
the liquidity of Nortel's common shares. For additional information
with respect to certain of these and other factors, see Nortel's
Annual Report on Form 10-K/A, Quarterly Report 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.

(x) Nortel, the Nortel logo and the Globemark are trademarks of
Nortel Networks.

ots Originaltext: Nortel Networks
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Contact:
For further information: Bo Gowan, +1-(972)-685-8278,
bogowan@nortel.com; Patricia Vernon, +1-(905)-863-1035,
patricve@nortel.com; Ben Roome, +44-(0)1628-43-3113,
benroome@nortel.com