Nortel Networks Introduces New Enterprise Convergence Products; Succession CSE 1000 Release 2.0, BayStack 460 to Optimize Voice, Data Network Deployments.

Business Editors & High Tech Writers

ATLANTA--(BUSINESS WIRE)--Oct. 29, 2002

Nortel Networks (NYSE:NT) (TSX:NT) today announced two additions to its voice over Internet Protocol (IP) product portfolio designed to deliver functionality, reliability and return on investment to enterprise customers seeking a converged network solution.

Central to Nortel Networks `One network. A world of choice.' enterprise vision, Nortel Networks Succession Communication Server for Enterprise (CSE) 1000 Release 2.0 provides the ability for enterprises to converge voice and data networks in a high-performance, extremely efficient manner that can dramatically reduce total cost of ownership. Nortel Networks also announced Nortel Networks BayStack 460 Power over Ethernet Switch, which will provide power over the local area network (LAN) for voice over IP applications.

Succession CSE 1000 Release 2.0 is targeted at large enterprise customers that require a distributed IP private branch exchange (PBX) solution. Enabling companies to converge their communications infrastructure, Succession CSE 1000 Release 2.0 extends convergence to the wide area network (WAN) and supports peer-to-peer networking topographies. Succession CSE 1000 Release 2.0 is designed to have greater survivability and redundancy while maintaining maximum feature performance. In addition, Succession CSE 1000 offers increased scalability with Release 2.0, which can accommodate 1,000 users per server, and enable aggregation to provide up to 10,000 IP end points with simplified numbering and centralized management.

"Nortel Networks enterprise portfolio gives our caregivers access to the information they need whenever and wherever they need it, ultimately improving the way we deliver patient care," said Brad Brown, chief information officer, Erlanger Health System. "Succession CSE 1000 Release 2.0 provides end-to-end networking that is key to helping us drive bottom line savings and improve patient care, which makes us more competitive."

"Succession CSE 1000 Release 2.0 provides reliable call servers at our main campus, survivable branch office gateways at our remote sites, connectivity with our existing Business Communications Manager, quality of service management via our Business Policy Switches and access to services that mobilize our workforce such as the virtual office feature with our i2004 Internet Telephones and CallPilot unified messaging," Brown said.

Enhancements that increase productivity are key to Succession CSE 1000 Release 2.0. Virtual Office and Corporate Directory features can enable employees who travel extensively to satisfy all their communications requirements with a consistent interface, whether working from headquarters, home or a remote branch office. This flexibility is also available at the desktop. Succession CSE 1000 supports a variety of telephone handsets to meet diverse user requirements, including new Nortel Networks i2002 Internet Telephones, i2004 and i2050 Software Phones and Meridian Digital Telephones, and 802.11 wireless voice over IP.

"The Nortel Networks CSE 1000 2.0 suitably impresses. With its increase in scalability, survivable branch office, interworking across the IP WAN, and dynamic hoteling features - it puts the Succession platform in a whole new ballpark. It makes it easy for enterprise customers to leverage the business and networking value of VoIP," said Brian Riggs, senior analyst, Current Analysis.

To assure efficient and secure delivery of power to IP desktop devices, Nortel Networks BayStack 460-24T-PWR Power over Ethernet Switch will be optimized for voice over IP applications in a 24-port Layer 2 switch with Quality of Service (QoS) functionality to protect voice traffic from latency issues. It will provide power over Ethernet in accordance with industry standard IEEE P802.3af, ensuring non-proprietary applications like IP telephone handsets, wireless access points and Web-based cameras can interoperate seamlessly in the LAN environment. Because the IP telephony handsets will require no additional power connections, adding new telephones or moving employees will be much easier and associated costs will be kept to a minimum, making this an attractive converged networking approach. Nortel Network plans to begin shipping the BayStack 460 in January 2003.

While the features of Succession CSE 1000 Release 2.0 and infrastructure enhancements from BayStack 460 increase deployment choices for customers implementing a converged solution, they also extend the breadth of Nortel Networks voice over IP product portfolio. Norstar, Meridian 1, Meridian SL-100, Business Communications Manager, Succession CSE 2000 and Succession CSE MX provide choices that allow customers - from small and medium businesses to large campus infrastructures - to deploy the solution that is right for them, and offer them the flexibility to implement infrastructure at their own pace according to their business requirements - without having to rip out existing infrastructure and without associated network downtime.

"Today's announcement is about giving customers the flexibility they need to implement an information infrastructure that serves their business case while maximizing performance and functionality," said Oscar Rodriguez, president, Enterprise Networks, Nortel Networks. "Succession CSE 1000 Release 2.0 provides the keystone to leveraging IP applications with a converged network to give customers a major competitive differential, while Baystack 460 will enable connectivity and network availability for mission-critical applications."

Nortel Networks offers a complete, end-to-end solution for companies implementing voice over IP capabilities, and is the only company that provides the flexibility for customers to deploy this solution at their own pace in a diverse environment while supporting next generation applications.

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 Wireless Networks, Wireline Networks, Enterprise 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, the Globemark, Succession, Baystack, CallPilot, Meridian, Meridian 1 and Norstar are trademarks of Nortel Networks.