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TORONTO - Meeting the expanding needs of regional and rural local exchange carriers in North America, Nortel* [TSX: NT, OTC: NRTLQ] has enhanced its portfolio of carrier VoIP services with the latest release of the  Communication Server (CS) 1500  solution, which adds new communication services like a subscriber web portal and on-demand conferencing. These new features are designed to help carriers increase customer satisfaction and retention.

Now more than ever, regional service providers need the most efficient and cost-effective tools to allow them to meet the demands of value-conscious subscribers. The latest enhancements to Nortel's CS 1500 offer compelling bundled or a la carte applications to give regional households and small and medium-size businesses (SMBs) communication services that unify their communications and messaging across landline, mobile and web platforms. These new product features became generally available in December 2008.

"We understand that our carrier customers are facing new economic challenges in today's market and are looking for new ways to increase revenue and subscriber loyalty," stated Samih Elhage, president, Carrier Voice and Applications Solutions, Nortel. "Applications such as unified messaging, on-demand conferencing or single number services can be deployed quickly and cost-effectively without disrupting the end user's service. Nortel has a strong track record of successes with sales to over 120 regional carriers globally. Part of that is because of the breadth and depth of our carrier VoIP portfolio, but more importantly, the CS 1500 is created specifically to address the budgetary constraints of the regional carrier market allowing them to offer the same advanced voice and multimedia services to their customers as carriers located in large metropolitan areas."

Nortel continues to innovate with end-to-end VoIP and SIP applications that help regional service providers retain and acquire new consumer and business subscribers.

Consumer Voice and Multimedia like Nortel's IP Powered Home solution delivers proven Public Switched Telephone Network (PSTN) feature transparency in a carrier-grade IP network as well as integrated consumer communications like video available across cable, broadband and wireless broadband networks. New consumer applications now available on the CS 1500 include:

• Unified Messaging - Allows users to combine multiple messages (email, voicemail, etc) into one single mailbox. Users also have access to their voicemails from multiple locations like a PC or they can dial-in from a phone. With unified messaging, users can retrieve all of their voicemail while online, and never need to call into their mailbox. Adding voice-to-email services, the ability to organize multiple greetings, call screening and television pop-ups, enhances Nortel's already vibrant voicemail offering. For carriers, these capabilities help increase revenue by customizing unified messaging emails with promotional displays as well as helping to increase customer retention for their VoIP offer.
• Voice-Over Cable - Allows cable service providers to reduce churn and drive incremental revenue by extending voice communications like calling line ID, message waiting, and call logs to the TV for existing cable and internet subscribers.
• Personalized call blocking - Allows subscribers to take back their leisure time by blocking unwanted calls and determine the times at which calls can be received.
• Single Number Service - Consumers and businesses can define up to six telephone numbers that ring simultaneously or in sequence in response to an incoming call. As well, subscribers can seamlessly transfer calls from their home phone to their mobile phone. For the user, this ensures that their important calls never go unanswered by facilitating anytime, anywhere, any device communications.

Business Voice and Multimedia like Nortel's IP Powered Business solutions provide end-to-end solutions for large enterprises and small and medium-sized business (SMBs). This solution delivers rich business voice features combined with unique unified communications capabilities making Nortel a market leader in carrier business solutions with large tier 1 deployments in all continents. New business applications now available on the CS1500 include:

• On-Demand Conferencing - Provides business users with simple ways to manage conference calling. This provides a new type of revenue stream for operators by allowing them to offer on-demand services for their specific markets.
• Subscriber Web Portal - A personalized web capability that carriers can offer under their own brand. This allows users to manage their voicemail and service subscriptions within an easy-to-navigate user interface thus reducing the complexity of call management.
• Customer Premise Equipment (CPE) Solution Bundling - Nortel is helping regional carriers specifically target SMBs by bundling customer premise equipment (CPE) like SIP phones with the CS 1500. This offering allows carriers to sell and host pre-tested IP solutions to the growing SMB market.

Nortel is unique in its approach to this market by integrating technology such as the Session Border Controller and the Application Server into the CS 1500 which ultimately helps lower capital and operational expenses for regional providers for both initial cash outlay and total cost of ownership.

In recognition of the current economic environment, Nortel has created several commercial programs designed to help providers upgrade from TDM or other legacy gear or replace competitor products. For example, Nortel's CS 1500 allows service providers to re-use existing line equipment and offers cost-effective evolution for existing Nortel DMS-10 and DMS-100 switches as well as other technologies widely installed in current carrier telephone systems such as DCO and EWSD switches.

Nortel expects to release the next version of the CS 1500 in Q309.

According to  Dell'Oro Group **, Nortel is the worldwide leader in carrier VoIP and has maintained that position since 2002. Nortel has shipped more than 100 million carrier IP voice and multimedia ports to over 320 carriers globally. Nortel provides VoIP solutions to two thirds of IDC's worldwide listing of top 20 carriers (by revenue). Since the  original launch  of the CS 1500 in June 2006, Nortel has shipped over 150 CS 1500 switches to over 120 customers globally.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. For more information, visit Nortel on the Web at www.nortel.com . For the latest Nortel news, visit www.nortel.com/news .

Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Nortel's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC. Unless otherwise required by applicable securities laws, Nortel 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, the Nortel logo and the Globemark are trademarks of Nortel Networks.

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

Contacts for Press and Analysts:

Miranda MacDonald
905-863-1098
mirandam@nortel.com

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