Rolls-Royce to Transform Network With Managed VoIP Service from Nortel US$20 Million Voice Network Makeover Will Help Improve Telecommunications Service, Reduce Costs

Rolls- Royce, a world-leading provider of power systems and
services, will transform its entire telephone network into a single,
advanced network providing VoIP services based on Nortel(x) (NYSE:
NT , TSX: NT) technology under a seven-year, estimated US$20 million
managed services agreement.

The agreement will make Nortel the preferred provider of
enterprise telephony solutions for the new Rolls-Royce global voice
network, which will initially serve 26,500 users in the United
Kingdom, the United States, Canada, Norway, Germany and France.

"We selected Nortel for this important network and telephony
infrastructure transformation because they truly understand our
communication needs and how to simplify our network infrastructure,"
said Jim Reed, IT purchasing director, Rolls-Royce "Nortel's
expertise and experience in delivering a highly comprehensive and
competitive managed service as well as its ability to build large,
reliable networks designed for delivery of new services convinced us
to select it as our preferred communications provider."

"This is a real milestone for Nortel," said Peter Kelly,
president, enterprise solutions for Nortel in Europe and the Middle
East. "Our proven global expertise in management and integration of
voice and data networks enables us to deliver an approach that will
help simplify Rolls-Royce's telephony and provide a platform to
address its future communications requirements as well."

The new Rolls-Royce global voice network will provide
comprehensive voice calling services, unified voice, fax and e-mail
messaging, and a platform for introduction of advanced mobility
services for communications and collaboration virtually anytime,
anywhere.

Nortel will provide full lifecycle services for the Rolls-Royce
network from the Nortel Global Services portfolio. This will include
design , integration and deployment of IP telephony equipment and
software, along with management and maintenance of both the existing
TDM-based network and the new VoIP network. Network management and
maintenance will consist of remote fault monitoring with proactive
network surveillance, customer- defined service level agreements for
response and resolution, moves and changes, comprehensive customer
reporting, and dedicated service management.

Nortel's enterprise VoIP solution for Rolls-Royce will include
Nortel Communication Server 1000, Nortel CallPilot(x) for unified
voice, fax and e- mail accessible from any location, and Nortel
mobility services.

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 Rolls-Royce

Rolls-Royce, the world leading provider of power systems and
services for use on land, at sea and in the air, operates in four
global markets - civil aerospace, defence aerospace, marine and
energy.

Rolls-Royce has a broad customer base comprising 600 airlines,
4,000 corporate and utility aircraft and helicopter operators, 160
armed forces and more than 2,000 marine customers, including 70
navies. The company has energy customers in 120 countries.
Rolls-Royce is a technology leader, employing around 36,000 people
in offices, manufacturing and service facilities in 50 countries.
For more information, visit Rolls-Royce on the Web at
www.rolls-royce.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. 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, the Globemark and CallPilot are
trademarks of Nortel Networks.

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

Contact:
For further information: Giorgia Casnedi, +44-1628-43-3117,
casnedi@nortel.com; Mark Buford, +1-(972)-684-8512,
mark.buford@nortel.com/