HOT Telecom to use Nortel IMS-Ready Solution for Voice, Instant Messaging

Airport City, Israel (ots/PRNewswire) -

- More HOT Subscribers to Benefit from New IP-Based Services

HOT Telecom, a consortium of cable service providers Golden
Channels, Matav and Tevel, has selected a next-generation carrier
solution from Nortel(x) (NYSE: NT , TSX: NT) for the next stage of
its cable telephony network upgrade.

Nortel will be the lead systems integrator for this upgrade, which
will position HOT Telecom to deliver new revenue-generating services
like managed VoIP, instant messaging, and presence awareness to
business and residential customers across Israel.

HOT Telecom plans to deploy a Nortel IMS-ready, carrier-grade
IP-based solution using network engineering, integration, operation
and maintenance services from Nortel's Global Services portfolio.
The network upgrade is expected to be fully deployed by the end of
2006.

"HOT selected Nortel because its technology will enable us to
respond to our significant growth in telephony subscribers and will
let us introduce new services to enhance our customer services
portfolio," said David Borochovsky, director of communications,
Engineering Division, HOT Telecom. "We already use Nortel
super-class carrier switches in our network . This latest project
with Nortel is a major step in the massive upgrade of our network,
which is needed because of our remarkable subscriber growth in
telephony, Internet and video on-demand services."

"This is another milestone in our continuing relationship with HOT
Telecom, which includes the recent deployment of HOT's enterprise
network in Yakum, Israel," said Sorin Lupu, president, Eastern
Region, EMEA, Nortel . "Our carrier-class VoIP solution and Global
Services will help HOT expand its subscriber base, reduce
operational costs and drive revenue growth through delivery of
cutting-edge services to enhance the customer experience. Putting in
place IMS-ready elements also makes HOT solutions secure and
future-proof, able to cope efficiently with changing customer
needs."

The HOT Telecom upgrade will include the Nortel Communication
Server 2000-Compact, a carrier-grade softswitch that supports
industry-standard VoIP protocols and enhances revenue opportunities
by making it simpler for carriers to reach new regions. The upgrade
will also include the Nortel Media Gateway 15000 Trunk Gateway,
which provides a highly scalable and high voice quality solution to
integrate traditional and next generation networks, and the Nortel
Border Control Policy 7200, which provides an advanced media proxy
designed to support VoIP services.

Nortel's Communication Server 2000-Compact softswitches have been
deployed by more than 70 service providers worldwide including
Verizon, BT, Telefonica and Cable & Wireless.

HOT Telecom also has an advanced converged IP telephony network at
its Yakum Headquarters that uses Nortel softswitch technology. The
network provides approximately 1,400 HOT Telecom employees with
anywhere, anytime access to communication services such as voice,
e-mail and multimedia collaboration regardless of device -
telephone, computer or PDA.

Nortel's VoIP Infrastructure solutions, products and services
deliver fully-featured, carrier-grade telephony, data, and
multimedia services over multi-service packet networks.

Nortel's Global Services include a full range of integrated
services for design, deployment, management and maintenance of
end-to-end multi- vendor network solutions, including seamless
migration to next generation technologies.

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 ", "targets", "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;
the sufficiency of recently announced restructuring actions,
including the potential for higher actual costs to be incurred in
connection with these restructuring actions compared to the
estimated costs of such actions and the ability to achieve the
targeted cost savings and reductions of Nortel's unfunded pension
liability deficit; 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 Form10-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: Greta Brown, +44-(0)1628-432968,
gretab@nortel.com; Mark Buford, +1-(972)-684-8512,
mark.buford@nortel.com