Nortel Networks: VTR Launches Advanced Broadband Services in Chile Based on Nortel Networks Technology

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VTR Launches Advanced Broadband Services in Chile Based on Nortel Networks Technology

Among World’s First Cable Providers to Offer Innovative, Personalized Services

SANTIAGO, Chile – VTR, one of the main providers of broadband access in Chile and a subsidiary of United GlobalCom, has launched an innovative series of Internet services for its customers across the country, based on service-enabling technology from Nortel Networks* [NYSE/TSX: NT].

VTR recently announced its new Broadband Flex services, believed to be among the world’s first commercial offerings of its kind. The new services allow VTR’s broadband customers to decide their connection speed every time they log on, and enable them to pay for only the time that they are connected.

“The target market for Flex,” said Pedro Assael, Manager, VTR, Broadband Internet, “is users who do not make intensive use of the Internet because they do not spend much time at home, and think that their frequency of use does not justify paying a flat rate. However, these people use high-speed Internet connections at work, and therefore consider the switched or dial-up Internet experience unsatisfactory. When they go online from home, they would like to enjoy the same broadband standards.”

Deployment of Nortel Networks Shasta* 5000 Broadband Service Node (BSN) – including IP (Internet Protocol) traffic shaping, IP traffic policing and personal content portal – has enabled VTR to provide a service plan that gives subscribers pre-paid broadband access for a modest monthly rate. Internet access is not limited because users can elect to surf the Internet on a pay-per-minute basis, selecting the connection speed they want (64, 300 or 600 kilobits per second), when they want it.

The Shasta cable solution VTR has deployed also supports additional, on-demand services like firewalls, VPNs (Virtual Private Networks), and content management.

“With the implementation of Nortel Networks Shasta BSN platform, we are able to serve our customers even better, by allowing them to personalize services and applications to fit each individual’s requirements,” said Dale Bassen, vice president, Engineering and Systems, VTR. “This new investment positions our company as a leading cable operator in Latin America. With our new Broadband Flex services, we expect to increase our broadband access subscriber base by an additional 25 percent over our previous projected number of new customers in the next year.”

Nortel Networks Shasta 5000 BSN is designed to enable service providers to aggregate up to 32,000 subscribers – via cable, DSL, private line, dial-up, wireless or any other access medium – onto a single platform. Shasta 5000 BSN also enables network-based, value-added IP services like firewalls, VPNs, the ability to individually allocate Internet access bandwidth, and other personalized services. Some of these applications are among the newest in the cable market, positioning VTR as a leading innovator of broadband services.

“As one of the main providers of next generation networks in the region, Nortel Networks supplies solutions that position innovative cable operators like VTR to offer advanced services, improve network performance and drive reduced operational costs,” said Chris Zanyk, managing director, Chile, Nortel Networks. “We will continue to help position VTR for growth as we have been doing since 1996, validating the leadership of both companies in development and provisioning of cable telephony and Internet technologies.”

“This innovative cable solution, developed to support VTR’s goal of broadband subscriber growth, is a great example of the success of the Nortel Networks cable strategy,” said Rob Wood, vice president, Global Cable Solutions, Nortel Networks. “Our commitment to cable operators includes new product development geared specifically to cable applications, following the technology and standards organizations which serve the cable industry; and implementation of real world solutions that address cable operators’ fundamental business and networking challenges.”

VTR, a wholly owned subsidiary of the North American United GlobalCom, is a leader in convergence in Chile, being the only telecommunications company in Latin America to offer three broadband services –Cable TV, Telephony and Internet Access- on one infrastructure, capitalizing on the benefits of integration. The communications services offered by VTR deliver a series of benefits to Chilean homes in terms of quality, price and security. Through its extensive HFC (Hybrid Fiber Cable) network, the company covers a potential market of 1.7 million homes in 43 cities across the country.

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 completion of the comprehensive review and the release of financial results and issuance of restated financial statements for 2000, 2001 and 2002 and the first and second quarters of 2003; the severity and duration of the industry adjustment and the continued reductions in spending by our customers; 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; negative impacts on our gross margins; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and our current debt ratings; the ability to meet the financial covenant in our credit facilities; the use of cash collateral to support our normal course business activities; the dependence on our subsidiaries for funding; the impact of our defined benefit plans and our deferred tax assets on our results of operations, cash flows and compliance with our financial covenant; the ability to 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; barriers to 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 and our ability to predict market demand for particular products; 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 generally and as a result of acceleration of the settlement date or early settlement of our purchase contracts; the impact of the New York Stock Exchange minimum listing requirements and the proposed consolidation of our common shares; the impact of supply and outsourcing contracts that 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 and intellectual property disputes. For additional information with respect to certain of these and other factors, see the most recent Form 10-Q and Form 10-K 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, Business Without Boundaries and Shasta are trademarks of Nortel Networks.

Contact for Press and Analysts:

Ferngene Kook
Nortel Networks
(954) 858-7101
fkook@nortel.com

Bo Gowan
Nortel Networks
(972) 685-8278
bogowan@nortel.com

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