Shanghai Telecom to Provide High-Bandwidth Services Powered by Nortel

r> SHANGHAI, Oct. 12 - Shanghai Telecom will use new metro networking technology from Nortel(x) (NYSE/TSX: NT) to provide high-bandwidth, business-critical voice, data and video applications to its customers in Shanghai, China's largest city and major economic center.

Nortel's Metro Ethernet Networking solution will position Shanghai Telecom to reliably and cost-effectively offer premium network services such as next-generation network voice services, Ethernet VPN-based business continuity services and potential IPTV services to its enterprise customers and individual end users.

"Our new Metro Ethernet portfolio takes a tried-and-true technology workhorse - Ethernet - to a new level," said Jackson Wu, president, Greater China, Nortel. "It enables service providers like Shanghai Telecom to use Ethernet to dependably deliver any kind of high-speed, high-bandwidth video and data service over the same infrastructure - and this is a key market differentiator for Nortel."

Shanghai Telecom will be deploying Nortel's high-performance Metro Ethernet Routing Switch 8600 at the network core. At the network edge, Nortel's Ethernet Services Unit 1800 will provide the delivery point for Ethernet-based services.

Underpinning the Nortel Metro Ethernet Networking portfolio are new technologies - Provider Backbone Bridging (PBB) and Provider Backbone Transport (PBT) - designed to allow service providers to use Ethernet to deliver the communication and entertainment services of the future to consumers and companies across cities and countries. PBB and PBT, which are innovative technologies set to revolutionize metro networking, provide Ethernet with carrier-class levels of attributes such as reliability and scalability.

The Nortel Metro Ethernet Networks portfolio - which includes solutions for multiservice optical, carrier Ethernet and wireless backhaul - enables service providers to address the growth of high-bandwidth video and data applications in their metro networks.

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 http://www.nortel.com. For the latest Nortel news, visit http://www.nortel.com/news.

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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; 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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 Form 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.

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