Nortel Teams with IBM, Technology Leaders to Speed Delivery of Converg

Nortel Teams with IBM, Technology Leaders to Speed Delivery of Converged Multimedia Services; Unveils IMS Solution, Industry Ecosystem to Enable Ubiquitous Access to Applications

    Business Editors/Technology Editors
    3GSM World Congress 2005

    CANNES, France--(BUSINESS WIRE)--Feb. 15, 2005--Nortel (NYSE:NT) (TSX:NT) has announced a comprehensive new networking solution designed to transform wireless, wireline and cable providers' business models by enabling operators to rapidly deliver the industry's broadest and richest suite of multimedia services. This new solution, including a group of technology partners anchored by IBM, will allow operators to offer multimedia services to virtually any end user device across any wired or wireless access network.
    Nortel's new Converged Multimedia Services (CMS) solution will streamline the complicated process of developing, integrating, testing and launching new multimedia services. CMS will help position service providers to drive reduced costs and create differentiated multimedia services designed to win the race for subscribers and achieve a competitive advantage.
    For end users, the CMS solution offers a dynamic new service environment and enhanced personalization capabilities. End-users will be able to initiate multiple services from within a single communication session. For example, they will be able to launch a video conference during a voice conversation, or access a personalized Video-on-Demand service subscription not just from their home TV, but online from a laptop, a hotel room or from a mobile phone.
    "Nortel is delivering precisely what this emerging market needs -- an open applications environment that will stimulate unprecedented service innovation and accelerate network convergence," said Alan Stoddard, general manager, Converged Networks, Nortel. "Our CMS solution leverages more than five years of internal R&D investment in SIP and the significant experience we have gained through deploying our SIP-based Multimedia Communications Server (MCS) 5200 in more than 40 service provider networks. We are well versed in what it takes to integrate different applications and extend them to the broadest possible base of devices and range of access networks."
    Nortel's CMS Solution consists of a comprehensive portfolio of IP Multimedia Subsystem (IMS), Multimedia Domain (MMD) and PacketCable standards-compliant networking products, complemented by a multi-vendor convergence ecosystem of best-in-class technology partners anchored by IBM. Through this ecosystem, Nortel plans to deliver a broad suite of pre-integrated and tested solutions to help service providers immediately attract new subscribers and generate new revenues through flexible bundles of multimedia services that can be accessed from any network connection and device.
    Nortel's CMS will enable multimedia services to be delivered over a common IP-based network using Session Initiation Protocol (SIP) to link the core network and the application service layer. Designed to easily evolve from today's circuit and packet switching networks, Nortel's CMS offering will extend well beyond industry standards to provide unique service control capabilities that will give service providers unprecedented levels of flexibility to integrate elements from separate applications to create differentiated services. Its service coverage capabilities will allow service providers to maximize market coverage by supporting a full range of devices and access security mechanisms.
    "Carriers are looking for a vendor that is able to integrate enablers, gateways, applications as well as end-clients in a multimedia service offering," said Bettina Tratz-Ryan, principal analyst, Gartner, Inc. "Vendors with a longstanding IP expertise are able to utilize their end-to-end solutions approach to allow operators a quick-to-market-going strategy for multimedia services."

    Convergence Ecosystem

    Nortel and IBM will combine industry leadership positions in networking and Information Technology to deliver on the promise of an IMS-based convergence solution. As part of a teaming agreement and anticipated future agreements with Nortel, IBM will contribute a Service Delivery Platform with a wide suite of applications and client software to enrich end-user Quality-of-Experience (QoE). IBM will also provide professional services capabilities to enable service provider billing and operations systems integration into CMS. Additionally, IBM will bring more than 180 telecom application software developer partners and its own software brands -- including Websphere and Lotus Notes -- to help deliver innovative CMS applications to market.
    "IBM is uniquely experienced for enabling multimedia services," said Sandy Aitken, IBM BCS Partner, EMEA Communications. "With a long history of converging voice, data and video communications, clients are looking to companies like IBM and Nortel to provide the solutions and expertise in integration for service providers and enterprises that will let them deploy the value added services that the emerging technology will allow."
    In addition to IBM, the Nortel-led ecosystem will include the following partners:
    Sonim Technologies - Nortel has partnered with Sonim Technologies to bring to market pre-integrated, Open Mobile Alliance (OMA) standards compliant, Push-to-Talk over Cellular (PoC) solutions and Group List Management Servers. These solutions will allow Nortel and Sonim to offer carriers best-in-class, carrier-grade voice over IP (VoIP) offerings that have been optimized under a full range of radio interfaces and coverage conditions in more than 30 global trials.
    Ubiquity Software - Nortel has extended its existing partnership with Ubiquity to deliver an IMS-compliant open service creation environment for third party developers. Ubiquity's carrier-grade SIP Application Server will enable seamless deployment of numerous converged services such as multi-player gaming across multiple types of IP networks.
    MetaSolv - Nortel and MetaSolv have extended their existing partnership to include CMS. MetaSolv's Network Mediation product will enable billing for IMS-based services by providing the critical Charging Data Function and Charging Gateway Function (CDF/CGF) for the Nortel CMS Solution.

    Nortel Portfolio

    Motorola - Nortel's CMS solution will leverage the Advanced Telecom Computing Architecture (AdvancedTCA) specification. Nortel has partnered with Motorola, a leader in AdvancedTCA platforms, to develop an enhanced next generation platform that will deliver faster processing, greater processor density and reduced footprint over competing AdvancedTCA solutions. This solution will enable investment protection by supporting legacy Nortel capabilities and by providing an advanced processing platform for future next generation products.
    "We have been working closely with Nortel to define and develop a common platform that delivers time, cost and flexibility benefits from AdvancedTCA, Carrier Grade Linux, and other industry standards," said Wendy Vittori, corporate vice president and general manager, Motorola Embedded Communications Computing. "Next generation applications, including the Nortel CMS portfolio, will benefit greatly from a lower total cost of ownership."

    Key elements of the Nortel CMS portfolio include:

--	Nortel Home Subscriber Server - maintains the unique service profile for each end user and supports multiple authentication schemes and service profiles. Nortel's Home Subscriber Server (HSS) is a modular solution which can be flexibly deployed to meet specific operator requirements.
--	Nortel Call Session Controller - Nortel's purpose-built Call Session Controller (CSC) supports highly advanced service control capabilities that deliver the differentiation service providers need to compete. Nortel's CSC builds on five years of R&D investment and SIP service deployments.
--	Nortel Policy Controller - manages policy enforcement and enhanced billing capabilities. Nortel's Policy Controller (PC) expands the standards-defined capabilities to enable guaranteed end-to-end QoS, an essential element of the future carrier-grade converged network.
--	Nortel Media Gateway Controller and Media Gateways - solution provides scalable interworking to the Public Switched Telephone Network (PSTN). Existing investments in Communications Server 2000-based solutions are retained and re-used in the CMS solution.
--	Nortel Multimedia Communications Server 5200 - provides value-added revenue-generating voice and multimedia services such as video conferencing. Existing investments in this product are re-used in the CMS solution.

    Nortel is well-positioned to lead the converged multimedia market space based on its real world deployment and experience in all key IMS pillar technologies, including Carrier VoIP, SIP Multimedia, Wireless Packet Core IP networking, and GSM, UMTS and CDMA radio technologies. Nortel is a leader in softswitch, packet gateway and multiservice switching technologies. In wireless, Nortel was the first vendor with wireless networks operating in all advanced radio technologies (including GSM/GPRS/EDGE, CDMA2000 1X/1xEV-DO, UMTS and WLAN).
    The CMS solution has been undergoing market trials since mid-2004 and will be generally available in the third quarter of 2005.

    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 and Quarterly Report on Form 10-Q 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. PacketCable is a trademark of Cable Television Laboratories, Inc. IBM, Websphere, and Lotus Notes are registered trademarks of International Business Machines Corp. Advanced TCA is a trademark of PCI Industrial Computers Manufacturers Group.
    Use of the terms "partner" and "partnership" does not imply a legal partnership between Nortel and any other party.

--30--ET/na*

CONTACT: Nortel Christie Blake, 978-288-8439 email: christbl@nortel.com or Jay Barta, 972-685-2381 email: jbarta@nortel.com or Ben Roome, +44 1628 43 3113 email: benroome@nortel.com

KEYWORD: TEXAS FRANCE INTERNATIONAL EUROPE TRACK INDUSTRY KEYWORD: TELECOMMUNICATIONS NETWORKING HARDWARE SOFTWARE COMPUTERS/ELECTRONICS TRADESHOW PRODUCT MARKETING AGREEMENTS SOURCE: Nortel

Copyright Business Wire 2005