Creating National Showcase for County-Wide Broadband Wireless Access

    TAIPEI, Taiwan, Dec. 5 /PRNewswire-FirstCall/ - A new Mobile WiMAX
network in the northeastern county of Yilan, built by Chunghwa Telecom in
association with Nortel(x) (NYSE/TSX: NT) and eASPNet, is to become the
first fully integrated broadband wireless network driven by a local
government under the Mobile-Taiwan (M-Taiwan) project.
    Radically impacting the daily lives of Yilan residents, visitors and
businesses - and positioning the district as a national showcase for
ubiquitous wireless broadband services - the WiMAX infrastructure will
enable broadband wireless access to such services as M-Learning,
M-Commerce, M-Tour as well as video surveillance and IPTV services.
    "This initiative demonstrates the significance of Mobile WiMAX
technology in advancing the government's rapidly evolving M-Taiwan
project," said Chun-Ming Hsieh, vice president, Chunghwa Telecom. "Nortel
is an established leader in Taiwan's telecommunications industry and we
look forward to working together in extending the same integrated wireless
capabilities to other areas of Taiwan to help bolster the competitiveness
of local economies."
    "The people of Yilan will now be able to take the Internet with them
wherever they go, and enjoy high-speed mobile access using virtually any
wireless-enabled device," said Jackson Wu, president, Greater China,
Nortel. "This is a momentous step forward for the M-Taiwan project."
    Nortel is providing Chunghwa Telecom with next generation Mobile WiMAX
base stations, based on the IEEE 802.16e standard, incorporating Nortel's
patented MIMO antenna technology. Nortel's MIMO is a key capability
enabling the provision of the most demanding real-time applications such as
VoIP and voice over WiMAX.
    Nortel will also provide an Access Service Network Gateway, customer
premises equipment, and network management capabilities, as well as network
integration and optimization services provided by Nortel Global Services.
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. Nortel's Global Services portfolio offers a full range of
network application, implementation, and support services for end-to-end
multi-vendor networks.
    Taiwan is playing a pivotal role in Nortel's WiMAX development. Nortel
recently signed an agreement with Chunghwa Telecom to deploy a WiMAX
solution in the operator's experimental park to create an environment for
testing WiMAX and integrating the technology with the Nortel Wireless Mesh
Network solution deployed in Taipei and Kaohsiung as part of the
government's M-Taiwan initiative. In addition, Nortel is deploying a WiMAX
trial system at the National Taiwan University campus, and has also
established a Center of Excellence for Devices in Taipei.
    Nortel is the only WiMAX vendor with products in virtually all mobile
technologies currently available across both public and wireless networks.
Nortel also owns dozens of patents in the technologies underlying the WiMAX
standard, and the company's eight years of work in OFDM/MIMO technology has
culminated with much of its patented technology being accepted as the basis
for the global WiMAX industry standard.
    About M-Taiwan
    The M-Taiwan Initiative is one of Taiwan's top 10 new infrastructure
programs. It engages local governments and private sector partners in
constructing an island-wide wireless broadband environment to provide
people with convenient Mobile WiMAX services and applications. The vision
of the M-Taiwan Initiative is to develop an infrastructure providing
wireless Internet access for 8 million subscribers and to provide broadband
internet coverage to 80% of the population in urban areas. For more
information, please visit http://www.pwlan.org.tw.
    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.
    Certain statements in this press release may contain words such as
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"estimates", "targets", "envisions", "seeks" and other similar language and
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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;
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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
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time required to implement Nortel's remedial measures; Nortel's inability
to access, in its current form, its shelf registration filed with the
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investment grade credit rating and any further adverse effect on its credit
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adverse affect on Nortel's business and market price of its publicly traded
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NYSE and/or the TSX to commence suspension or delisting procedures; (ii)
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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
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access business to Alcatel-Lucent; additional valuation allowances for all
or a portion of its deferred tax assets; Nortel's failure to protect its
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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.

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