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May 6, 2003

Norstan Chosen to Upgrade IP Telephony Solution for Coquitlam, One of North America’s Leading High-Tech Cities

Nortel Networks solution will drive improved efficiencies and tax savings

Minneapolis – Norstan,* Inc., a leading provider of communications technology solutions, announced today that the City of Coquitlam, British Columbia, Canada, one of the leading high-tech cities in North America, chose Norstan Communications, Inc. to install the City’s new IP (Internet protocol) telephony system. Norstan’s communications solution for Coquitlam – a Nortel Networks* Succession* 1000 – will be a large Succession multi-site operation in North America. Installation is scheduled to be completed by June 30, 2003. The value of this new business, which includes the sale of 700 phones and a new, state of the art, data infrastructure, is estimated to be $1,106,000 Canadian.

One of the fastest growing cities in the Vancouver area, Coquitlam wanted to replace its existing system that had rising operational and maintenance costs with an IP-capable system. The Nortel Networks Succession 1000 provides Coquitlam the innovative, cost-saving solution it sought. The new system will link 15 sites (City Hall, fire hall, community centers, works yard, sports facilities) throughout the City. Changing to the new system is estimated to save taxpayers more than $300,000 Canadian annually.

In addition to significant savings, the Nortel Networks system will provide numerous other benefits to Coquitlam. The system’s voice recognition capability will allow city employees to access phone mail through voice prompts. The new system will also have the ability to expand into wireless (the Centrex system had no such capability) and the Nortel Networks Succession 1000’s single platform will make it easier to manage. In addition, the City will test the Nortel Networks system’s Unified Messaging capability with a pilot program that allows participants access voice, fax and e-mail from their desktops.

“We take pride in our City’s initiatives to bring high-tech solutions that enable us to improve service to our customers, keep costs down and enhance the efficiency of our organization,” says Jon Kingsbury, Mayor of Coquitlam. “This is especially important when systems become increasingly inefficient to operate and maintain. We think the Norstan solution meets our communications needs, including the ability to expand in the future in a way that is both responsible and responsive to our customers.”

“The communications technology solution we will install for Coquitlam will do exactly what the city wants – drive significant tax savings and provide employees with the benefits of the modern world of IP telephony,” said Larry J. Schmidt, executive vice president of Communications Technology Direct Solutions at Norstan. “We’re confident we can provide cities, other government entities, companies – indeed, almost everyone – with solutions that meet their communications needs because that’s what we’ve proven again and again.”

About Norstan, Inc., www.norstan.com**
Norstan, Inc. (NASDAQ: NRRD) …the technology services people who improve the way their customers communicate. A full-service telecommunications solutions company that delivers voice and data technologies and services, and remanufactured equipment to select corporate end-users and channel partners. Norstan also offers a full range of technologies for contact centers, messaging, infrastructure, conferencing and mobility. Headquartered in suburban Minneapolis, Norstan, a company small enough to care, yet big enough to serve, has offices located throughout North America. To learn more, visit the Norstan website at www.norstan.com.**

About Coquitlam, British Columbia, Canada, www.coquitlam.ca**
With its thriving town centre, growing retail and business sector and a host of tourism activities, Coquitlam is a dynamic city with a commitment to community-based living. Coquitlam offers the vibrant action of a growing city combined with a beautiful natural setting boasting abundant parks and green space, along with arts and cultural venues and multiple recreational facilities. Through its partnership in the Industry Canada Smart Choices project and other initiatives, Coquitlam leverages emerging technology solutions to enhance its customer service and operations. Centered in the heart of the lower-mainland, Coquitlam's natural advantages include quick access to downtown Vancouver and the US border, and a strong economic base. Visitors are welcomed, businesses excel and residents are valued, making Coquitlam a true City of Choice.

About Nortel Networks, www.nortelnetworks.com
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.

*Nortel Networks, the Nortel Networks logo, the Globemark and Succession are trademarks of Nortel Networks. Norstan and associated product names are trademarks or registered trademarks of Norstan, Inc. in the United States and/or other countries. All other products and services mentioned in this document may be trademarks of the companies with which they are associated.

**This is a 3rd party link as described in our Web linking practices.

Contact for Press and Analysts:

Dana Hughens
Nortel Networks
(615) 432-4636
dhughens@nortel.com

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