Nortel Wins Role in BT s 21 Century Network

Paves Way for Wide-Scale Adoption of Breakthrough Nortel Metro Ethernet Solution

JANUARY 15, 2007 - LONDON - BT has selected Nortel* [NYSE/TSX: NT] to play an important role in its 21st Century Network (21CN) programme. Nortel will be one of two suppliers of a carrier-scale Ethernet solution for 21CN that exploits Ethernet in a fundamentally new way and is expected to drive a radical change in the economics of carrier networks.

BT aims to use the new Ethernet solution to transport high-bandwidth services - from mission critical business applications to full-streaming video - with new levels of simplicity, quality and cost-savings.

"Today s announcement marks a significant industry turning point," said Mike Zafirovski, president and chief executive officer, Nortel. "BT is using Ethernet technology in a completely new way to provide an answer to the challenge of simplifying network management, redefining service quality and reducing costs," Zafirovski said.

"We have been anticipating the widespread deployment of Ethernet in our 21CN architecture for a while but have been waiting for development to help make the technology viable for deployment in carrier grade networks," said Matt Beal, director core convergence, BT Wholesale. "The implementation of Ethernet also complements fully BT s well established MPLS strategy within 21CN."

PBB-TE (Provider Backbone Bridging Traffic Engineering) is an emerging IEEE standard that incorporates a set of enhancements to Ethernet known as Provider Backbone Transport (PBT) that allows the use of Ethernet for a carrier class transport network.

"As one of the early pioneers of PBT we have already witnessed significant movement in the market for metro transport networks as it splits between an evolution of a router-based approach and a movement towards Ethernet," said Philippe Morin, president, Metro Ethernet Networks, Nortel.

"Nortel believes that BT s thought leadership and the pre-eminence of its 21CN strategy will speed wider-scale adoption of Ethernet-based solutions. It will also help continue the momentum to standardize the technology through the recognized standards bodies," added Morin.

BT has selected Nortel s Metro Ethernet Routing Switch 8600 and Metro Ethernet Services Unit 1850 for the Ethernet component of its 21CN. PBB-TE promises to bring control to data paths within very large carrier networks, enabling true quality of service, meaningful service level agreements and the ability to set aside specific paths for communications, increasing network performance while providing carrier-grade resiliency.

PBB-TE is currently progressing through industry standardization within the IEEE (Institute of Electrical and Electronic Engineers) 802.1 Working Group.

A number of service providers including The Chinese Academy of Sciences, COLT Telecom, MTC Kuwait, Pride, Shanghai Telecom, SURFNet and Versatel have already adopted various elements of Nortel s Metro Ethernet Networking solutions including the Metro Ethernet Routing Switch 8600, the Optical Multiservice Edge 6500 and Provider Backbone Bridges - which enable millions of services to be provisioned via the network, versus the thousands available in competing solutions.

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.

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Ben Roome

Contact for Press and Analysts

Nortel Networks

+44-1628-43-3113

benroome@nortel.com