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May 19th, 2004
Pelephone Selects Nortel Networks as National 3G Provider
CDMA 1xEV-DO Network to Provide Broadband Mobile Service Across Israel
TEL AVIV, Israel – Pelephone, Israel’s first CDMA third generation (3G) wireless network technology operator, has selected Nortel Networks* [NYSE/TSX: NT] as the exclusive provider of a CDMA2000 1xEV-DO broadband wireless network in a two-year supply agreement.
Nortel Networks will deploy radio access equipment across Pelephone’s national wireless footprint to enable broadband mobile services across Israel. Pelephone currently serves approximately 2 million subscribers across the country. The network upgrades will position Pelephone to offer wireless data services to its customers, such as personalized video downloads and streaming (MPEG-4), regional content such as live television news and sports broadcasts, and other consumer applications. For businesses, Pelephone plans to offer e-mail with large attachments, secure intranet access and other mobile office applications. “Nortel Networks ability to move swiftly and cost-effectively is once again positioning Pelephone as first-to-market in delivering a new era of mobile data services in 3G technology to Israel,” said Jacob Gelbard, president, Pelephone Communications Ltd. “Nortel Networks leadership position in 1xEV-DO technology and their 20-year position in the Israeli market make them an ideal partner for this project.” “2004 will be remembered as the year wireless went broadband, and we are very pleased to be working with leading operators like Pelephone in ushering in this new mobile broadband era,” said Sorin Lupu, managing director, Nortel Networks Israel. “We are very proud to expand our presence in Pelephone’s national footprint. We remain committed not only to helping position Pelephone to drive new revenue opportunities through data services, but also to driving down the overall cost of operating their network.” The first phase of the network deployment is expected to enable 3G 1xEV-DO service for the metropolitan area of central Israel by the end of August 2004. Expanded coverage across the remainder of Pelephone’s national footprint is expected to be commercially available towards the end of 2004. Nortel Networks is the primary provider of Pelephone’s existing CDMA2000 1X wireless network, which was launched as Israel’s first commercial 3G-technology wireless network last year. Nortel Networks is the sole supplier of Pelephone’s core network (packet and circuit) across Israel, and is now the sole supplier of 1xEV-DO radio equipment. Under the new supply agreement, Nortel Networks will deploy Low Density and Compact CDMA Metro Cell radio base stations (BTS), CDMA Enhanced Base Station Controllers (EBSC), and CDMA Packet Data Serving Nodes (PDSNs). The Nortel Networks Compact Metro Cell is a highly-dense, scalable and power-efficient 3G base station that provides the largest carrier density of any macro base station available in the industry. The company’s EBSC is the industry’s highest capacity CDMA2000 1X voice and packet data platform – available in a reduced footprint – and is scaleable to support capacity increases as needed by operators. Nortel Networks will provide network services including turnkey design and engineering optimization, installation and commissioning. Nortel Networks will also provide ‘cutover’ and migration services to migrate existing CDMA2000 1X hardware and software from Nortel Networks and other vendors to support 1xEV-DO. Nortel Networks wireless technology is designed to maximize existing customer investments and help service providers drive down capital and operating costs. Nortel Networks equipment migrates to broadband mobile technologies through modular upgrades. This approach re-uses existing base station equipment to reduce or eliminate the need for costly hardware replacements. Nortel Networks has designed, installed and launched more than 300 wireless networks in over 50 countries across the globe. Nortel Networks was the industry’s first supplier with wireless networks operating in all advanced radio technologies, and is the only end-to-end provider of all next generation wireless solutions. Based in Airport City, Nortel Networks Israel Ltd. is a subsidiary of Nortel Networks. Nortel Networks has been active in Israel for the past 25 years and is today the largest provider of telecommunications in Israel with customers including Bezeq, Cellcom, Partner, Pelephone, The Israeli Ministry of Defense, and leading financial and insurance companies, universities, hospitals and others. 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 or www.nortelnetworks.com/media_center 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 outcome of Nortel Networks independent review and planned restatement of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on credit and support facilities and public debt obligations; the sufficiency of Nortel Networks 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; continued reductions in spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; Nortel Networks ability to meet the financial covenants in its credit facilities; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations, Nortel Networks cash flows and compliance with financial covenants; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks 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; changes in regulation of the Internet; the impact of the credit risks of Nortel Networks 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 Nortel Networks purchase contracts; risks associated with a consolidation of Nortel Networks common shares; the impact of Nortel Networks 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 future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters. For additional information with respect to certain of these and other factors, see the most recent Form 10 Q/A and Form 10-K/A 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 and Business Without Boundaries are trademarks of Nortel Networks. CDMA2000 is a trademark of the Telecommunications Industry Association (TIA). Use of the terms “partner” and “partnership” does not imply a legal partnership relationship between Nortel Networks and any other party. Contact for Press and Analysts:Jay Barta
Nortel Networks
+33 1 69 55 51 11
jbarta@nortel.com
Orit Ben-Harush
Nortel Networks
+972 8 914 3491
orit.ben-harush@nortel.com
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