BellSouth Selects Nortel Networks to Deploy Ecuador's First CDMA2000 3G Wireless Network.

Business Editors & High-Tech Writers

QUITO, Ecuador--(BUSINESS WIRE)--July 23, 2002

BellSouth Ecuador has selected Nortel Networks (NYSE:NT)(TSX:NT.) to upgrade its national wireless network in Ecuador with the deployment of a third generation infrastructure using CDMA2000 1X technology.

Under an agreement estimated at approximately US$17 million, Nortel Networks will overlay BellSouth's existing TDMA network with a complete CDMA2000 1X solution, including radio access and switching equipment. The new, 3G-enabled network, expected to be the first of its kind in Ecuador, will position BellSouth to take advantage of higher voice capacity and to drive down its cost per subscriber, while offering new 'always on' high-speed data services.

"Our commitment with BellSouth's customers in Ecuador to provide higher quality wireless services is driving our decision to deploy a third generation infrastructure," said Carlos Blanco, chief executive officer, BellSouth Ecuador.

"This contract further reinforces our long-standing relationship with BellSouth, and continues our momentum in deploying CDMA2000 1X networks around the world," said Kevin Taylor, director, Wireless Networks, Nortel Networks CALA (Caribbean and Latin America). "We will work closely with BellSouth to evolve its network, to help reduce its cost of delivering voice services, and to provide new, revenue-generating 3G data services."

Nortel Networks has worked with BellSouth International for almost 10 years, deploying wireless networking equipment throughout Latin America - including Brazil, Chile, Colombia, Guatemala and Nicaragua.

Nortel Networks is implementing CDMA2000 around the world, and has deployed more than 30,000 CDMA base stations for customers in 14 countries on five continents.

BellSouth Corporation is a Fortune 100 communications services company headquartered in Atlanta, serving more than 45 million customers in the United States and 14 other countries. Consistently recognized for customer satisfaction, BellSouth provides a full array of broadband data and e-commerce solutions to business customers, including Web hosting and other Internet services. In the residential market, BellSouth offers DSL high-speed Internet access, advanced voice features and other services. BellSouth also provides online and directory advertising services, including BellSouth RealPages.com.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro and Enterprise Networks, Wireless Networks and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

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 severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to meet financial covenants contained in our credit agreements; the ability to make acquisitions and/or 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; 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; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks 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 Networks, the Nortel Networks logo and the Globemark are trademarks of Nortel Networks. BellSouth is a trademark and RealPages a service mark of BellSouth.