Spanish Cable Operator R Delivers New Business Services Enabled by Nortel

MADRID, Spain, December 4 /PRNewswire/ --

- R Launches IMS-Ready Carrier-Hosted VoIP and Multimedia Solution in Spain

R Cable y Telecomunicaciones (R), the leading cable operator in Spain's Galicia region, is delivering a suite of voice, multimedia and advanced IP services, including telephony, video and instant messaging, to business and residential customers using a Carrier VoIP solution from Nortel(x) (NYSE/TSX:NT). R's new services portfolio enables business customers to outsource their communications, enhance productivity and prepare for fixed mobile convergence, while residential customers can select from a range of new voice and multimedia services.

"We're in the business of making it easier to talk, instant message, watch videos, listen to music, get the news and play games - in fact whatever makes business and personal life more simple, more pleasant, more effective and more productive," said Arturo Dopico, managing director, R. "The growing demand for interactive services, and the need to deliver them as simply as possible, is as relevant for our business clients as it is for the personal user."

R chose Nortel's Carrier VoIP, Multimedia and Global Services solution because it helped deliver the broadest suite of VoIP business and residential services with the highest levels of service reliability and availability. The solution includes PacketCable(TM) voice and SIP multimedia services for residential and business markets. "When introducing new services it is also reassuring to know that we're working with the global leaders in Carrier VoIP with established expertise in this field," added Dopico.

"R is a key customer for Nortel Spain and we've worked closely with them for a number of years," said Michel Clement, president Southern Europe and Africa, Nortel. "This latest project focuses on Nortel's key strength, which is building a highly dependable and scalable network and acting as systems integrator to enable R to deliver reliable and cost-effective new services to its customers across Galicia."

A clear evolution path - that provides IMS-ready elements for secure services running across both Internet and mobile networks and supports a full range of multimedia capabilities - was also a deciding factor in R's selection of its Nortel solution. While R's immediate objective was to launch VoIP value added services they also continually track customer wants and satisfaction and chose a solution to help them handle changing customer requirements in a timely and cost-efficient manner.

R's Cable VoIP solution is based on the Nortel Communication Server

2000-Compact a carrier-grade softswitch that supports a wide range of voice and multimedia business and residential features and open industry-standard SIP PacketCable and PacketCable Multimedia protocols. Nortel ranked number one in the global markets for service provider softswitches and gateways for the first half of 2006, according to Synergy Research Group. The solution for R also includes turnkey services from Nortel's Global Services portfolio consisting of change design, engineering, installation, commissioning, network integration and marketing support.

Nortel's Global Services include a full range of network application, implementation and support services for end-to-end multi-vendor networks. Nortel has also deployed IMS-ready solutions with over 100 customers and is currently engaged in IMS trials with leading operators in cable, wireline, CDMA and GSM/UMTS markets.

About R

R is the Galician fibre optic operator of communications. R's main target is to offer all the Galician companies and homes the most advanced services in all the scopes of communication and to equip them so that they can receive the new generation of interactive services that are being developed. To achieve this, R is building up a new and powerful fibre optic network which is still in construction but advancing at a steady pace. Currently it provides integrated services of telephone, high speed Internet and multi-channel thematic television in the seven main Galician cities and other towns and cities of a smaller size, as well as in the main industrial sites of Galicia. Furthermore, in the near future its clients will be able to enjoy the advantages of the interactive digital television that R is introducing - a process which has nearly been completed.

The Galician operator, that has almost 200,000 clients of whom 40,000 are companies, has already invested more than 470 million Euros in this project and has planned to offer its telecommunication services to another 45 Galician council areas before mid 2008.

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 approval of its proposed class action settlement; 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, including completion of the sale of its UMTS access business to Alcatel-Lucent; 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 support 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 support facility; 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 the 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 Form 10-K/A, Quarterly

Reports 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.

Web site: http://www.nortel.com/news