China Ministry of Railways Selects Nortel to Provide GSM-R Network for Qinghai-Tibet Railway; Follows Pioneering, Year-Long Trial on the World's Highest Rail Line.

BEIJING -- China's Ministry of Railways has selected Nortel (NYSE: NT) (TSX: NT) to provide a digital wireless communications network for the world's highest altitude rail service - the Qinghai-Tibet Railway.

This will be the first commercial use of GSM for Railways (GSM-R) technology in China, following a pioneering, year-long trial of Nortel's technology over more than 186 kilometers of track built on perennially frozen land at altitudes up to 4,780 meters above sea level.

The 1,142-kilometer Qinghai-Tibet Railway will be the first in China supported solely by GSM-R communications with no traditional analog system available for back-up. It will also be the first railway in China to use GSM-R to transmit safety data for train control and the first to adopt double coverage solutions to enhance system safety, reliability and availability. In addition, it will be the first GSM-R infrastructure in China to incorporate GPRS (General Packet Radio Service) for data applications.

"The trial conducted by Nortel successfully passed all required tests meeting our strict standards. It demonstrates Nortel's breadth of expertise and experience in GSM-R technology and ability to work with difficult conditions and terrain," said Shu Kai Hu, vice chief executive, National Quinghai-Tibet Railway Construction Administration Office. "This new wireless network represents the most up-to-date communications technology available to the railway industry worldwide and we are pleased to move beyond the trial to now fully implement the Nortel GSM-R solution"

In 2004, Nortel began the GSM-R digital wireless communications network trial for the Ministry of Railways creating the first test track in Asia supported solely by GSM-R. During the trial, Nortel successfully demonstrated the ability to develop system test plans, conduct GSM-R integration, and perform network optimization and troubleshooting adapted to the challenging environmental conditions along the Qinghai-Tibet Railway.

"Nortel has delivered the world's leading railway communications technology to China," said Robert Mao, president and chief executive officer, Greater China, Nortel. "Our noteworthy completion of a demanding field trial under challenging conditions serves as testament to Nortel's strong commitment to customers and to the quality and contribution of Nortel's research and development team in China. To the delight of the Ministry of Railways, the Quality of Service (QoS) of our GSM-R technology exceeded ETCS (European Train Control System) Level 2 specifications and requirements. As a landmark project for China to develop its western region, Nortel is pleased to provide the communications system that will help ignite and power the region's economic growth."

GSM-R is proven as the industry's most complete and cost-effective solution for wireless railway communications and is currently being implemented in 15 countries worldwide. Offering a secure platform, GSM-R provides voice and data communications between the operational staff of a railway organization, including drivers, dispatchers, shunting team members, train engineers and station controllers.

Nortel's telecommunications networking experience, complemented by specialized implementation services designed specifically for the railway industry, provides an end-to-end GSM-R network solution that is also scalable to support GPRS and high-speed data and voice. The Nortel GSM-R solution provides a number of advantages, including a railway-customized GSM-R Base Transceiver Station for better trackside coverage under severe environmental conditions. Nortel's GSM-R infrastructure enhances QoS and reliability, and provides clear voice and data communications for conventional and high-speed trains.

Nortel is the world leader in GSM-R technology with more than 10 years of experience and more than a 60 percent share of railway line kilometers deployed to date. Nortel has been selected to deploy GSM-R networks in nine countries, including national deployments for the three largest railway operators in Europe.

Nortel deployments include nationwide GSM-R networks for RFF in France, Network Rail in Great Britain and Deutsche Bahn in Germany. Nortel has deployed GSM-R networks for railway lines between Bilbao and Santander for Spain's Renfe (Entidad Publica Empresarial Red Nacional de los Ferrocarriles Espanoles), for Eastern Railway in India, for Cesky drahy (CD) in the Czech Republic, and for Slovak Railways in Slovakia. Nortel has also deployed dedicated, end-to-end high-speed line systems for Deutsche Bahn's ICE between Frankfurt and Cologne, and for SIRTI in Italy between Rome and Naples.

Nortel has been a pioneer in the GSM-R standards process since 1992, and works with Union Internationale des Chemins de Fer (UIC) and ETSI European Telecommunications Standards Institute (ETSI) on standards improvements. Nortel supplied equipment for the Mobile Radio for Railways Networks in Europe (MORANE) trial and was a major contributor to the European Integrated Railway Radio Enhanced Network (EIRENE) GSM-R standard.

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. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

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