Puerto Rico Telephone Launches Voice over IP Using Nortel Solutions; R

    Business Editors/High-Tech Writers

    SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Jan. 12, 2005--Puerto Rico Telephone (PRT), the leading telecommunications provider in Puerto Rico and a Verizon affiliate, is launching a suite of new multimedia and advanced voice over Internet Protocol (VoIP) services to residential and corporate customers throughout the island using converged VoIP and multimedia communications solutions from Nortel (NYSE:NT)(TSX:NT).
    "PRT is taking IP technology to the residential market as well as small and medium businesses in Puerto Rico in response to the growing local demand for sophisticated telecom services," said Thomas Perez Ducy, chief marketing officer for PRT. "With Nortel's world-class voice over IP solutions and thorough knowledge of our network requirements, today we have a highly flexible network that will help us address current and future market demand while keeping operational costs down."
    Nortel's VoIP and multimedia solutions give PRT the ability to offer residential customers a new level of communications control and personalization, providing them with an integrated communications solution that includes voice and video calling, text messaging, and file and Web sharing. Individual household members can create personal communications profiles via a personal communications Web site, allowing them to establish a single contact number for all their communications devices that permits them to function as a single, integrated communications tool.
    "An advanced voice over IP infrastructure such as the one PRT is building will greatly enhance the communication experience of its customers, helping to increase their functionality, mobility and productivity," said Manuel Terrero, vice president, Wireline Networks, Nortel, Caribbean and Latin America. "We are proud to continue our long-standing business relationship with PRT. We've worked closely with them to deliver a robust and secure infrastructure that will help position them to drive new, revenue-generation services."
    PRT's VoIP network features Nortel's Multimedia Communication Server (MCS) 5200, which uses open standards-based software and commercially available hardware to help service providers deliver a rich suite of multimedia and collaboration services that can be seamlessly integrated with existing telephone services. PRT has also deployed Nortel Communication Server 2000 superclass softswitches. In addition, PRT is participating in Nortel's MarketForce program, a comprehensive joint marketing program.
    PRT is also introducing 'PhoneMax' service in Puerto Rico, based on Nortel MCS 5200 Multimedia PC Client. PRT customers can use this PC-based software phone as a primary desktop phone, supplementary phone or telecommuter phone. It eliminates the need for a traditional voice line, using a single Internet connection for both voice and data connection.
    Nortel has a proven product portfolio for packet voice and multimedia services that enables delivery of solutions across all four carrier voice over packet market applications - cable, local, long-distance and wireless. Nortel ranked #1 in the global markets for both service provider softswitches and gateway ports for 3rd quarter 2004, according to industry analyst firms Synergy Research Group, In-Stat/MDR and Dell'Oro Group.

    About PRT

    Puerto Rico Telephone is an affiliate of Verizon Communications and a leading telecommunication provider in Puerto Rico. The company was a pioneer in launching the most advanced technology in voice, data and wireless services, including a 100% digital infrastructure, a sophisticated ATM network and the most powerful wireless network on the island. These advanced technologies have served as the main engines of economic growth and development in Puerto Rico. Verizon Communications is one of the world's leading providers of communications services, with approximately US$68 billion in annual revenues.

    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.

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CONTACT: Nortel Ferngene Kook, 954-858-7101 email: fkook@nortel.com or Christie Blake, 978-288-8439 email: cblake@nortel.com or Puerto Rico Telephone Irmarie Cervera, 787-317-5561 email: icervera@prtcmail.prtc.net

KEYWORD: TEXAS INTERNATIONAL LATIN AMERICA INDUSTRY KEYWORD: TELECOMMUNICATIONS SOFTWARE NETWORKING HARDWARE COMPUTERS/ELECTRONICS PRODUCT MARKETING AGREEMENTS SOURCE: Nortel

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