China Putian, Nortel to Establish Joint Venture for 3G Telecom Equipme

    Business Editors/High-Tech Writers

    BEIJING--(BUSINESS WIRE)--Jan. 20, 2005--China Putian Corporation and Nortel (NYSE:NT) (TSX:NT) today signed a Joint Venture Framework Agreement (JVFA) to establish a joint venture for research and development (R&D), manufacture and sale of third generation (3G) mobile telecommunications equipment and products to customers in China. China's Premier Wen Jiabao and Canada's Prime Minister Paul Martin, currently on an official visit to China, witnessed the signing ceremony.
    Under the JVFA, China Putian and Nortel agree to prepare and negotiate with each other on a definitive joint venture agreement by June 30, 2005.
    When established, the new company - named Putian-Nortel Networks Telecommunications Equipment Co., Ltd. - will likely be headquartered in Wuhan, capital of Hubei Province, and will focus on TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) and WCDMA (Wideband CDMA) products and solutions, as well as related network engineering and optimization services. China Putian will own 51 percent of the joint venture; Nortel, the remaining 49 percent.
    "The signing of today's JVFA signals a new level of cooperation between Nortel and Putian," said Xing Wei, president, China Putian. "It will position us to capitalize on the tremendous opportunities presented by China's rapidly growing wireless industry and to significantly accelerate the internationalization of our 3G offerings."
    "The JVFA strategically reinforces our commitment to driving the evolution of China's telecom industry," said Bill Owens, president and chief executive officer, Nortel. "Nortel and Putian are both leading telecom players in the market, and this collaboration will not only enable us to fully leverage our respective resources and expertise in wireless networking solutions, but will also strengthen our capability to offer industry-leading solutions for our customers and new prospects in China.
    The current agreement builds on a June 2004 Memorandum of Understanding (MoU) signed by China Putian and Nortel for cooperation on R&D and manufacture of 3G equipment and products. The two companies have already cooperated on such projects as the recent 3G field trials sponsored by China's Ministry of Information Industry (MII).
    A front-runner in the development and commercialization of TD-SCDMA technology and products, China Putian is a director of China's TD-SCDMA Industry Alliance and, by rotation, the current chair.
    Nortel is one of the world's major suppliers of 3G networks, as well as the only end-to-end provider of all next generation wireless solutions. Nortel is also a founding member of the TD-SCDMA Forum.

    About China Putian

    A State-owned enterprise directly under the State Capital Supervision Management Committee of the State Council, China Putian is one of the largest telecommunication equipment manufacturers in China. Its product portfolio includes both fixed and mobile communications and holds a strong market position in application services, information terminal products, industry informationalization, peripheral equipment, as well as electronic devices and components. It also has complete strategy and industry preparedness in emerging technologies such as 3G end to end solutions covering WCDMA, CDMA2000, TD-SCDMA and Next Generation Network (NGN). More information about China Putian can be found on the web at www.china-putian.com.

    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. 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 world's greatest challenges. 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 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 Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the 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 Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal controls over financial reporting; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including breach of its support facility and public debt obligations and Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (SEC); ongoing SEC reviews, which may result in changes to our public filings; the potential delisting or suspension of Nortel's and NNL's publicly traded securities; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in August 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 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 Nortel's customers; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's 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's 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, which is currently not available, of Nortel's forward purchase contracts; the impact of Nortel's 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; and the future success of Nortel's strategic alliances.
    For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K 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.

--30--AWG/na*

CONTACT: Nortel Jay Barta, 972-685-2381 jbarta@nortel.com or Tina Warren, 905-863-4702 tinawarr@nortel.com www.nortel.com or China Putian Corporation Mo Jiang Hua, +8610 6360 2994 mojianghua@china-putian.com www.china-putian.com

KEYWORD: TEXAS CHINA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: HARDWARE TELECOMMUNICATIONS NETWORKING INTERNET E-COMMERCE MARKETING AGREEMENTS SOURCE: Nortel and China Putian Corporation

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