Smartcom Takes 3G Wireless Services Nationwide in Chile with Nortel Te

    Business Editors/Technology Writers

    SANTIAGO, Chile--(BUSINESS WIRE)--Jan. 11, 2005--Smartcom, a leading wireless operator in Chile and an affiliate of Spain's Grupo Endesa, is expanding its third generation (3G) wireless network to boost capacity and meet growing nationwide demand for advanced data services using CDMA2000 1X technology from Nortel (NYSE:NT)(TSX:NT).
    Smartcom has been operating a CDMA 1X network in Santiago based on Nortel solutions since 2002. With the expansion, Smartcom will be able to offer advanced mobile services like high-speed Internet access, e-mail with attached files, image and video downloading, and video streaming to subscribers throughout Chile.
    "We are continuously working to bring our subscribers the best in high-speed mobile services," said Jaime Gros, general manager, Smartcom. "Smartcom first launched 1xRTT in Santiago with Nortel technology back in 2002, and last year we launched 1xEV-DO broadband wireless services in the capital with Nortel technology. Our successful deployments with Nortel have kept us at the forefront of wireless services in Chile and our experience in broadband wireless network deployments has enabled us to provide current and potential customers with one of the most extensive arrays of broadband mobile services available today in Chile and in the world!"
    Nortel is installing both core and access equipment -- including switching platforms, radio base stations and base station controllers -- to upgrade Smartcom's existing nationwide CDMA2000 network to a CDMA 1X infrastructure. The first phase of the project, focused on the south of Chile, has already been completed. Smartcom expects to start offering new services there immediately, in time for the influx of visitors during Chile's summer months. The entire project is expected to be completed by the end of 2005.
    "As a leading provider of advanced wireless infrastructure in Latin America, Nortel is proud to have been chosen once more by Smartcom to help with their latest network evolution project," said Chris Zanyk, country manager, Nortel Chile. "Deploying our CDMA 1X solutions nationwide will position Smartcom to drive new, revenue-generating applications, delivering added value to its customers."
    Nortel has been working with Smartcom since 2001, when the two companies began deployment of a CDMA 1X network in Santiago. They completed Latin America's first commercial 3G wireless call in November of that year. With subsequent network expansions and deployment of Nortel CDMA2000 1xEV-DO technology in Santiago, Smartcom now operates one of the fastest and most advanced wireless networks in the Southern Cone of Latin America.
    "This project reaffirms our commitment to building secure and reliable communication networks that help enhance the human experience in the region and around the world," said Kevin Taylor, vice president, Wireless Networks, Caribbean and Latin America, Nortel. "We enjoy working with innovative operators like Smartcom and will continue to provide our extensive expertise in broadband wireless technologies to help them reach their business objectives."
    Nortel has designed, deployed and launched more than 300 wireless networks in more than 50 countries around the world. Nortel was the first industry supplier to have wireless networks operating in all advanced radio technologies (GSM/GPRS/EDGE, CDMA2000 1X and EV-DO, UMTS and WLAN), and is the only end-to-end supplier of all new generation wireless solutions.

    About Smartcom

    Smartcom, of Spain's Endesa Group, is the third leading wireless operator in Chile, with over 1.5 million customers. With its continuous innovation, today Smartcom is incorporating the most advanced, high-speed wireless data technology as part of its ongoing corporate re-launch program.

    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. CDMA2000 is a trademark of the Telecommunications Industry Association (TIA).

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CONTACT: Nortel Ferngene Kook, 954-858-7101 email: fkook@nortelnetworks.com or Smartcom Ricardo Muchnick, +56-2-444-5000 email: RMuchnick@smartcom.cl

KEYWORD: TEXAS SPAIN CHILE INTERNATIONAL LATIN AMERICA EUROPE INDUSTRY KEYWORD: TELECOMMUNICATIONS NETWORKING INTERNET E-COMMERCE PRODUCT MARKETING AGREEMENTS SOURCE: Nortel

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