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July 16, 2003
Hong Kong Broadband Network Limited Deploys Next Generation Network Based on Nortel Networks Solution
Expects to Drive Cost Savings from Moving Voice, Data to Single, 'Packetized' Network
HONG KONG – Hong Kong Broadband Network Limited, one of the fastest growing broadband services providers in Hong Kong based on number of subscribers, has deployed a next generation packet network using a voice over IP (Internet Protocol) solution from Nortel Networks* [NYSE/TSX: NT].
This new network, one of the largest voice over IP networks in the world, has positioned Hong Kong Broadband Network to drive reduced costs by moving voice and data traffic onto a single, ‘packetized’ infrastructure. "We have made Hong Kong telecommunications history, attracting over 120,000 new subscribers since we launched high-quality, packet-based telephony services in April 2002," said Ricky Wong, chairman, Hong Kong Broadband Network Limited. "Deploying a next generation packetized network from Nortel Networks has allowed us to provide converged voice and data services at a substantially lowered capital investment and much reduced continuing operational cost." "Transferring the cost savings to our customers has helped position us as one of the most competitive players in the Hong Kong market," Wong said. "The fast uptake of subscribers and the continued growth is a testament to our strong position." The new network is based on Nortel Networks Succession* voice over IP solution, which is designed to provide a cost-effective foundation for delivery of new multimedia and packet voice service bundles. Hong Kong Broadband Network recently began offering a special package of fixed-line, IDD (International Direct Dial) and broadband Internet services for Hong Kong residential customers. "This network deployment is a major milestone for Hong Kong Broadband Network," said Sue Spradley, president, Wireline Networks, Nortel Networks. "The adoption rate of broadband services in Hong Kong ranks among the highest in the world, and we have provided a technology platform that positions Hong Kong Broadband Network to address this market opportunity." "Hong Kong is a major technology hub in Asia, and Hong Kong Broadband Network clearly sees the benefits of cutting-edge technology and a next generation network," said Stephen Tsui, managing director, Hong Kong, Nortel Networks. "The versatile platform we have provided enables Hong Kong Broadband Network to provide data, voice and video services according to customer demands." At the heart of Nortel Networks solution for Hong Kong Broadband Network is Nortel Networks Succession Communication Server 2000-Compact. This is a superclass softswitch that can position service providers to economically serve business, residential and transit markets with a comprehensive set of services designed to address opportunities for generating new revenues. A superclass softswitch is one that provides true service provider circuit-to-packet migration, including: local, tandem and long distance capability on a single platform; full business and residential telephony service sets; regulatory features like "Lawful Intercept" and "Number Portability;" third party interoperability; and carrier-grade reliability and scalability. Nortel Networks solution for Hong Kong Broadband Network also includes Nortel Networks Passport* Packet Voice Gateway (PVG). Passport PVG bridges packet data networks with traditional Public Switched Telephone Networks (PSTNs) to enable greater network flexibility at lower costs. Passport PVG’s convergence features provide a single, intelligent network for integrated voice, video and data services with sizeable bandwidth. Packetization enables voice, video and data traffic to be divided into smaller pieces – packets – that can be sent separately across the carrier network. As a result, multiple phone calls and Internet connections can 'share' the same line. With packetization, bandwidth dedicated to a single call on today's networks can, for example, be reallocated during moments of silence in the conversation to transmit packets from other calls or Internet connections. This enables more efficient use of network resources, and opens the door to new services that can be run across existing telephone lines. In the first quarter of 2003, Nortel Networks was #1 in global market share in carrier packet voice equipment, including shipments of voice over IP and voice over ATM (asynchronous transfer mode) gateway ports, according to Synergy Research Group. Nortel Networks was also the global softswitch market share leader, according to Synergy Research Group. Hong Kong Broadband Network Ltd. ("HKBN") is a wholly-owned subsidiary of City Telecom (HK) Ltd. principally engaged in the fixed network business of the Group, for the provision of broadband Internet access and local telephone services, targeting to launch pay-TV service by year 2003. Aggressive in developing own network infrastructure, HKBN has successfully extended its network coverage to 1.2 million homepass, representing 60 percent of the total number of households in Hong Kong. Aiming to provide diversified telecommunications services, HKBN is striving to the leadership position in the Hong Kong fixed telecommunications network market. For more information of HKBN, please visit www.hkbn.com.hk** 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 customer financing and commitments; stock market volatility; the entrance into an increased number of supply and outsourcing contracts which contain delivery and installation 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 and Passport are trademarks of Nortel Networks ** This is a 3rd party link as described in our Web linking practices. Contact for Press and Analysts:Lily Yu
Nortel Networks
+ 852 2100 2120
lilyu@nortelnetworks.com
Ann Fuller
Nortel Networks
(613) 768-1208
afuller@nortelnetworks.com
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