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September 16, 2004

dvcom Selects Next Generation Network from Nortel Networks

Plans to Use for Pakistan-Based Network, Offering National, International Long Distance Voice, Data, Multimedia Services

ISLAMABAD, Pakistan – dvcom Limited has awarded Nortel Networks* [NYSE/TSX: NT] a contract to supply a next generation network (NGN) for delivery of high-quality national and international long distance (LDI) voice and data services in Pakistan under a license granted by the Pakistan Telecommunications Authority (PTA). Nortel Networks will plan, build and support the new packetized network.

"This will be the first LDI network of its kind in Pakistan," said Abdul Wassay, chief executive officer, dvcom. "We will deploy 15 points of presence (POPs) including 14 in Pakistan and one in the United Kingdom during our first year of operation, improving network access for subscribers."

"We will be the first carrier in the country to introduce such a broad and comprehensive range of highly desirable voice, data and multimedia products and services to our customers in Pakistan, based on world-leading Nortel Networks technology," Wassay said.

Packet technologies converge multiple networks into one by converting voice, video and data into tiny packets that can be transmitted together over a single high-speed network. A packetized network makes a wide range of new services possible and can significantly reduce the per-minute cost of long distance communications.

"Our packet-based solution is delivering substantial benefits to existing and new long distance carriers around the world because it helps lower transport and capital costs while allowing operators to explore additional revenue opportunities enabled by new value-rich voice and multimedia services," said Kamal Ahmed, managing director, Pakistan, Nortel Networks. "There is tremendous potential in this country's rapidly deregulating telecommunications market, and we are committed to helping dvcom deploy its new packet network and establish a strong presence among Pakistan's business and residential customers."

Nortel Networks long distance packet solution for dvcom will include Nortel Networks Succession* Communication Server (CS) 2000-Compact to provide voice over IP (Internet Protocol) and data services nationally. It will also include Nortel Networks Passport* Packet Voice Gateway (PVG) to enable switched, carrier-grade telephony and data services for international long distance customers.

Nortel Networks Succession CS 2000-Compact superclass softswitch enables service providers to deliver the full suite of traditional voice services for both businesses and consumers over a packetized network with voice and data traffic sharing the same communications lines to provide more efficient and cost-effective use of existing transmission capacity.

Passport PVG provides a complete gateway to world-class Internet telephony. Its powerful features enable voice and data convergence, providing a rapid, low-cost path to the world of packet switched networking. Offering advanced voice processing functionality like voice compression, statistical multiplexing, silence and fax idle suppression, Passport PVG can achieve up to 66 percent in bandwidth savings, according to internal Nortel Networks studies, while ensuring the same quality and reliability as a traditional TDM network.

dvcom is also deploying a Nortel Networks Multimedia Communication Server (MCS) 5200 to enable hosting of advanced multimedia and collaborative services, and a Prepaid Services Platform (formerly known as Periphonics*) to provide a complete pre-paid/post-paid calling solution.

Nortel Networks MCS 5200 is a carrier-grade Session Initiation Protocol (SIP)-based media and applications server, delivering advanced multimedia and collaborative applications through the same commercially available hardware and open-standards software. It transforms the way users communicate by enabling next generation tools that improve productivity and facilitate ubiquitous access to communications services.

For the entire year 2003 and the first half of 2004, Nortel Networks ranked #1 in the global markets for carrier packet voice and softswitch revenue, according to Synergy Research Group (SRG). Over the past year, Nortel Networks has announced wins with major carriers globally, including Verizon, BellSouth, Bell Canada and Charter Communications in North America; Chungwha Telecom and Dacom in Asia Pacific; Cable & Wireless and Telefonica in the Caribbean and Latin America; and Cable & Wireless, Telco Global, Telenet and THUS in Europe.

dvcom Limited is a newly founded company in Pakistan and it has licenses for Long distance, International and nationwide Limited mobility networks. dvcom boasts a very experienced telecom team and is backed by AKD securities, Pakistan's largest stock brokerage company.

As a global innovation leader, Nortel Networks enriches consumer and business communications worldwide by offering converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks 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 or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel Networks filing obligations on 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 controls; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; 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 and Nortel Networks cash flows; 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; 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, Business Without Boundaries, Succession, Passport and Periphonics are trademarks of Nortel Networks.

Contact for Press and Analysts:

Isabel Lee
Nortel Networks
65-6380 8828
bellee@nortel.com

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