China Mobile Selects Nortel Networks

China Mobile Selects Nortel Networks to Expand Hebei Province GSM Network; Estimated US$36 Million Upgrade Expected to Increase Capacity by 1.8 Million Subscribers

Source: Business Wire

China Mobile, the largest wireless carrier in the People’s Republic of China, has selected Nortel Networks (NYSE:NT)(TSX:NT) to expand its GSM (Global System for Mobile Communications) digital cellular network in Hebei province under a contract estimated to be worth approximately US$36 million. Network expansion is planned for completion by mid-2003.

The upgrade — to be based on Nortel Networks Univity GSM access and core network solutions — will position China Mobile to increase network capacity in Hebei province by 1.8 million subscribers. In addition, the contract provides for introduction and implementation of both GPRS (General Packet Radio Service) and EDGE (Enhanced Data Rate for GSM Evolution) to support migration to a rich set of wireless data services.

EDGE is designed to deliver wireless packet data — on average three times faster than GPRS — for Web browsing, streaming audio and video, multimedia messaging, location-based services, m-commerce, Virtual Private Networks (VPNs) and other wireless services.

“Nortel Networks is proud to have been chosen once again by China Mobile to implement this major GSM network upgrade,” said Robert Mao, president and chief executive officer, Greater China, Nortel Networks. “This expansion will enhance China Mobile’s offering in Hebei province by enabling delivery of new, revenue-generating services to a much larger subscriber base while positioning China Mobile to drive reduced operating expenses.”

Univity Wireless Data Networks leverage Nortel Networks leadership in capacity, reliability, and spectral efficiency. Univity products will also position China Mobile to seamlessly evolve to a converged voice and data packet network, and to drive reduced costs.

Nortel Networks has deployed wireless networks in 17 of China’s 31 provinces — and supplied GSM digital infrastructure equipment to China Mobile in eight provinces, including Hebei, Shaanxi, Tianjin, Xinjiang, Guizhou, Anhui, Liaoning, and Hunan. In Hebei province, the working relationship between Nortel Networks and China Mobile dates back to 1995. Since then, Nortel Networks has been actively involved in construction of Hebei’s GSM network and subsequent expansions.

Globally, Nortel Networks has deployed 80 GSM/GPRS networks in more than 50 countries and is supplying GSM/GPRS systems to enable Wireless Data Network services for more than 30 operators around the world. Nortel Networks is the industry’s only supplier with Wireless Data Networks operating in all three advanced technologies — GPRS, CDMA2000 and UMTS.

China Mobile currently operates exclusively self-funded subsidiaries in 18 provinces of China. Mainly supplying mobile telephony, data, IP (Internet Protocol) telephony and multimedia services, China Mobile also provides Internet, fax, data, handset banking, Global Access WAP and a host of other value-added services in addition to basic voice. More information on China Mobile is available at www.chinamobile.com.

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 and Univity are trademarks of Nortel Networks.

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