Cingular Selects Nortel Networks for GSM/GPRS Upgrades; Benchmark-Setting Spectrum Innovations to Drive Reduced Capital Outlays, Increase Savings.

Business Editors & High-Tech Writers

DALLAS--(BUSINESS WIRE)--March 6, 2002

Cingular Wireless, the nation's second largest wireless carrier, has signed a supply agreement with Nortel Networks (NYSE:NT)(TSE:NT.) for GSM/GPRS infrastructure upgrades in the domestic United States and Puerto Rico, as well as innovations designed to help reduce Cingular capital and operating expenses.

Under terms of an estimated US$500 million agreement signed in late November 2001, Nortel Networks will continue to support Cingular's growth needs in its GSM networks in North Carolina, South Carolina, coastal Georgia and eastern Tennessee for three years. This will include deployment of radio, core switching and intelligent networking equipment to support GSM voice and GPRS data services.

The agreement also includes a TDMA-to-GSM upgrade for the Cingular network in Puerto Rico.

Network upgrades will support migration to EDGE, and position Cingular to drive new revenues with services such as Web browsing, location-based services, m-commerce, Virtual Private Networks (VPNs), personal messaging, music and video.

Nortel Networks will also deploy radio spectrum innovations for Cingular that have been demonstrated to increase voice radio traffic capacity by as much as 120 percent with no reduction in quality of service. This spectral efficiency was realized in a Cingular market trial through implementation of Nortel Networks Fractional Frequency Reuse and Advanced Radio Frequency Algorithms.

With introduction of Adaptive Multi-Rate Vocoders in terminals and network infrastructure, it is anticipated that Cingular can increase spectral efficiency by an additional 200 percent. Cingular estimates this technology will significantly reduce previously projected capital expenses for new radio equipment, as well as associated operational costs.

"The customer is number one and Cingular is committed to enhancing the user experience," said Bill Clift, chief technology officer, Cingular Wireless. "The spectrum utilization technology demonstrated by Nortel Networks will position Cingular to achieve its long-term cost goals and allow the company to provide for future voice and data growth demands."

"Growing demand for capacity, coupled with the need to deliver next generation data services, presents today's wireless operators with tremendous spectral efficiency challenges," said Phil Marshall, senior analyst, Wireless/Mobile Technologies, The Yankee Group. "Spectral efficiency is a key consideration, particularly for TDMA operators who are transitioning their networks to GSM. Technologies that stretch this resource provide significant cost advantages, as well as free up capacity to ensure the legacy TDMA network continues to operate properly during the transition."

The supply agreement broadens a long-standing relationship that began with Nortel Networks supplying wireless infrastructure to BellSouth Mobility and Southwestern Bell Wireless prior to the creation of Cingular. In October 2001, Cingular announced the commercial launch of a GPRS network in the southeastern United States using Nortel Networks infrastructure. In September 2001, Nortel Networks was selected to provide an ATM backbone for Cingular to connect 87 markets throughout the United States. Nortel Networks was also selected to install tandem switching equipment to create networking efficiencies and cut costs for Cingular in managing shared network arrangements with other operators.

"Nortel Networks is empowering industry leaders like Cingular to find new ways to boost network investments and reduce costs while providing the highest quality of service for their subscribers," said Pascal Debon, president, Wireless Networks, Nortel Networks. "We are stretching capacity and spectrum to new limits, and helping position operators to meet voice demand today and to capitalize on the 'always on' data opportunities of tomorrow."

In addition to radio base stations and switching equipment, Nortel Networks GSM solution for Cingular Wireless includes Nortel Networks Shasta 5000 Broadband Service Node for secure delivery of new, IP-based services with quality of service, and Nortel Networks Passport 15000 Multiservice Switch.

Nortel Networks GSM overlay will support both the 1900 Mhz and 850 Mhz licenses owned by Cingular Wireless. The Puerto Rico upgrade is expected to result in the first complete TDMA-to-GSM overlay in the Cingular Wireless network. Cingular Wireless expects to begin offering commercial GSM services in Puerto Rico in the second quarter of 2002.

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 Long Haul 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 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, the Globemark, Shasta and Passport are trademarks of Nortel Networks.