China Telecom Selects Nortel Networks to Provide Optical Backbones for Hubei Province.

Business/High-Tech Editors

WUHAN, China--(BUSINESS WIRE)--Sept. 20, 2001

Plans to Bring Benefits of High-Performance Optical Internet

to China's "Optical Valley"

Nortel Networks (NYSE:NT)(TSE:NT.) has been selected to supply new, high-speed optical transmission backbone networks for Hubei Telecom, China Telecom's subsidiary in Hubei province.

Nortel Networks will provide Hubei Telecom with two backbone networks. One is expected to serve the "Optical Valley" of China, including the capital city of Wuhan and the province's rural areas, beginning in November. The other is expected to span the province to serve 13 cities and countryside towns across 1,100 kilometers beginning in January 2002.

With nearly 30 years of operating experience in Greater China, Nortel Networks has won contracts estimated to be worth more than US$1.2 billion since the start of 2001 from customers such as China Telecom. Nortel Networks is also investing in China to deliver key next generation networking solutions, and its comprehensive R&D facilities in Beijing will play an important role in developing new technologies.

Both new Hubei Telecom optical backbone networks will be based on Nortel Networks OPTera Long Haul 1600 Optical Line System, featuring 10 gigabits-per-second DWDM (dense wavelength division multiplexing) line technology and using global standards such as SDH (synchronous digital hierarchy).

DWDM technology splits light into as many as 160 channels to maximize capacity on each optical fiber, allowing more efficient transmission of data across the Internet backbone. DWDM facilitates multi-terabit systems, essential to meeting tomorrow's network demands, using state-of-the-art, high-bandwidth optical components and high-bandwidth opto-electronic circuits.

"Nortel Networks has been successful in deploying 10 gigabit networks worldwide, and this is the very first deployment of our OADM (Optical Add Drop Multiplexing) capabilities in China," said Yuan-hao Lin, vice president, sales and technology, Nortel Networks China. "We are delighted to provide Wuhan and other cities in Hubei province with leading-edge optical networking technology to help the municipal government develop local infrastructure."

Nortel Networks OPTera Long Haul 1600 Optical Line System offers high reliability and scalability to support new, data-intensive Internet applications from terrestrial and wireless carriers, as well as Internet Service Providers.

Hubei Province will join a number of other China Telecom provincial subsidiaries in deploying 10-gigabit optical solutions from Nortel Networks. To date, Nortel Networks has won more than 30 10-gigabit optical contracts in China.

"China Telecom selected Nortel Networks for its industry leading technology, as well as its full understanding of customer needs," said Zhang Wenqing, vice general manager, China Telecom. "Furthermore, China's first deployment of OADM technology in Wuhan leverages our position as the leading national infrastructure equipment provider in the Optical Valley."

Nortel Networks was the No. 1 provider of WDM solutions in China for the first half of 2001, according to RHK, a leading telecommunications research firm.

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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