Callahan Associates Selects Nortel Networks to Upgrade German Cable Network.

Business Editors & High-Tech Writers

LONDON--(BUSINESS WIRE)--Sept. 18, 2001

Callahan Associates has selected a consortium led by Nortel Networks (NYSE:NT)(TSE:NT.) for an upgrade of its cable network in Baden-Wurttemberg to enable delivery of a wide range of advanced communications services for both business and residential subscribers beginning in summer 2002.

This is another milestone for Nortel Networks in Germany, following selection earlier this year by Callahan-subsidiary Kabel NRW of a Nortel Networks-led consortium to upgrade its cable network in the German Federal State North-Rhine-Westphalia. With deployment of this network already underway, Nortel Networks is expected to be the first supplier to deliver a complete cable upgrade solution -- including Voice over IP (VoIP) -- for the European market.

Callahan's two network upgrades will lay the groundwork for transition from traditional cable TV to next generation cable network services in Germany. The consortium will supply infrastructure to enable high-speed Internet access, high-performance video, Internet Protocol (IP) services, data transmission, voice telephony, digital TV programming, and interactive TV for residential customers and businesses.

"This win demonstrates our momentum and market leadership in the provisioning of solutions to cable operators throughout Europe," said Pascal Debon, president, Nortel Networks EMEA (Europe, Middle East, Africa). "Callahan's network selection includes our market leading Optical Internet and IP Services, as well as key components from our Succession Carrier Voice over IP portfolio."

"We look forward to continuing our working relationship with Nortel Networks in Baden-Wurttemberg, based on their progress to date in NRW and their capability to fulfill our ambitious upgrade," said David Colley, chief executive officer of Callahan in Germany.

The Baden-Wurttemberg cable network is expected to be based on various IP and optical components from Nortel Networks, including Passport 8600, Succession Communications Server 2000, Passport Packet Voice Gateway, OPTera Metro 5200, OPTera Long Haul, and Preside for Telephony.

Nortel Networks is a global leader in networking and communications solutions and infrastructure for service providers and corporations. The Company is at the forefront of transforming how the world communicates, exchanges information and profits from the high-performance Internet through capabilities spanning the Optical Internet, Wireless Internet, Intelligent Internet and IP (Internet Protocol) technologies and services. Nortel Networks does business in more than 150 countries and 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 including at the most senior management levels; fluctuations in cash flow, the level of outstanding debt and debt ratings; 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 Corporation and Nortel Networks Limited with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks Corporation and Nortel Networks Limited disclaim 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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