Nortel Focus on Integrating Networks Allows Customers to Focus on Business

Toronto (ots/PRNewswire) -

- Global Services Business Establishes New Operational Model,
Microsoft Alliance

Enterprises and communications service providers can bring their
communications challenges to Nortel[1] [NYSE/TSX: NT] and expect
tailored solutions without worrying about the nuts and bolts of their
networks. That's the key message behind Nortel's new services-led
business focus, Dietmar Wendt said today in outlining the progress
made since his appointment nearly two months ago as president of
Nortel's Global Services business.

"We want to be the 'partner of choice' and the number one network
services and solutions provider in all segments where we choose to
compete," Wendt said. "To achieve this, we plan to relieve our
customers of network concerns by ensuring they have the right
hardware, software and configurations for maximizing interaction of
networks and components from multiple vendors, integrators and
services. Nortel can take over these time-consuming details for
customers, freeing valuable resources to focus on their businesses,
not their networks."

"Key next steps include building on our base of qualified
resources in the regions through hiring and by establishing
additional delivery partner relationships," Wendt said. "We also need
to improve our partner incentive plans, establish competitive
pricing, and execute on our new relationship with Microsoft."

Nortel has leveraged its extensive expertise in real-time voice
and multimedia integration to become a strategic partner to
Microsoft[1] for advanced unified communications solutions and
systems integration, the companies announced today.

"Restoring Nortel to a position of leadership and growth requires
a more services and solutions-led approach," said Mike Zafirovski,
president and CEO, Nortel. "We are making rapid progress toward a
services business that will align Nortel with the industry's best."

Picking up the pace in its move to a more services-led approach,
Nortel has also:

- Established a new operational model for the Global Services
business unit more suitable for competing in this market space. The
model features four Service Product Groups focused on global business
development - Network Implementation Services, Network Support
Services, Network Managed Services and Network Applications Services.
It also includes two Business Solutions Groups to drive vertical
market solutions and to create new services capabilities through
Nortel's expanding services partner ecosystem - Network Business
Solutions and Network Partner Solutions. Nortel is also investing in
the evolution of its services tools and core processes using a Lean
Six Sigma approach.

- Strengthened regional services execution and delivery by
establishing local accountability for resource planning, skills
development and acquisition, cost management, sales effectiveness,
and customer satisfaction. This is expected to make Nortel more
nimble in responding to the needs of global enterprises like
London-based Rolls-Royceand service providers like India's Bharti
Airtel Limited, each of which recently signed long-term managed
services agreements with Nortel.

- Defined a 'go-to-market' model that delivers Nortel-branded
services and solutions directly or through channel partners and
systems integrators based on customer requirements.

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. In preparation of
its financial outlook in this press release, Nortel has made various
assumptions related to its potential additional services revenues
generated from its strategic alliance with Microsoft including: a
lack of competitive technologies to displace or diminish the revenue
potential of the joint unified communications solution; stable
regional market dynamics for this solution, with the greatest revenue
opportunities existing in North America and Europe; primary focus of
future services revenues on integration and network monitoring, and a
market stable hourly service rate of $US225 in 2007; Nortel capturing
1/3 of the revenue associated with the service revenue generated from
any Converged Office deployment where Nortel is involved; successful
evolution of Exchange and associated software from Microsoft to a
Unified Messaging platform; ability to leverage Nortel's existing
installed base market and capture 30 - 40% of the IP conversion
market for this installed base by 2009; and sustained dedication of
the parties to grow aggressively this market opportunity. The above
assumptions, although considered reasonable by Nortel at the date of
this press release, may prove to be inaccurate and consequently
Nortel's actual results could differ materially from its expectations
set out in this press release.

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 the restructuring actions announced in this press
release, including the potential for higher actual costs to be
incurred in connection with 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 2005
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.

[1]Nortel, the Nortel logo and the Globemark are trademarks of
Nortel Networks. Microsoft and Exchange are trademarks of Microsoft.

Use of the terms "partner" and "partnership" does not imply a
legal partnership between Nortel and any other party.

ots Originaltext: Nortel Networks
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Mark Buford, +1-972-684-8512, mark.buford@nortel.com. Jay Barta
+1-972-685-2381, jbarta@nortel.com


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