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VTR Selects Nortel Networks for Cable Voice Over IP Solution in Chile

Posted on: Tuesday, 18 May 2004, 06:00 CDT

VTR, one of the main broadband Internet providers in Chile and an affiliate of Liberty Media, has selected Nortel Networks (NYSE:NT)(TSX:NT) to deliver and implement a cable voice over Internet Protocol (VoIP) network to provide telephony services to residential customers throughout Chile.

Currently providing cable telephony and other broadband services in Chile, VTR will use Nortel Networks VoIP solution to extend service to cities it has not been able to reach before and where consumers don't have access to alternative services. As part of VTR's service offering, customers in Chile will also be able to keep their existing phone number when they move anywhere within the VTR network.

VTR is currently undertaking trials of IP Telephony services in Gran Santiago and plans to commercially launch the network in the Metropolitan Area by the end of 2004. VTR expects to gradually expand the network to the rest of the country in early 2005.

"VTR is always responsive to the Chilean market demands and it's our objective to always deliver the most advanced services to our customers," said Hernan Benavides, engineering manager, VTR. "IP Telephony allows delivery of a service that is equal or superior to traditional telephony standards in terms of quality, while providing the possibility of new and innovative applications."

"As one of the main providers of next generation networks in the Latin American region, Nortel Networks delivers solutions that position innovative operators like VTR to offer advanced services, improve network performance and reduce operating costs," said Manuel Terrero, vice president, Wireline Networks, Caribbean and Latin America, Nortel Networks.

As part of this project, VTR will deploy Nortel Networks Succession Communication Server (CS) 2000-Compact superclass softswitch. Succession CS 2000 provides a comprehensive set of services designed to help service providers economically address new, revenue-generating opportunities in business, residential and transit markets. Also included will be Nortel Networks Passport Packet Voice Gateway (PVG), Nortel Networks Preside network management systems and professional services.

"It's a pleasure to work with VTR again in their continuous effort to bring leading-edge communications services to their customers in Chile," said Christopher Zanyk, country manager, Chile, Nortel Networks. "Nortel Networks Succession voice over IP portfolio will position VTR to quickly expand service offerings throughout the country, facilitating new markets opportunities and revenue growth."

Nortel Networks has been working with VTR since 1996, starting with the deployment of a cable telephony network in Chile. Most recently, the companies announced deployment of Nortel Networks service-enabling technology, placing VTR among the world's first cable providers to offer usage-based Internet access.

For the entire year and fourth quarter of 2003, Nortel Networks ranked #1 in the global markets for voice over IP ports shipped and in global softswitch revenue, according to Synergy Research Group and In-Stat/MDR. Nortel Networks has a proven portfolio of products and services for packet voice and multimedia services. Nortel Networks is providing Succession VoIP solutions to leading operators, including Charter Communications, Sprint, MCI, Cox Communications, TeleCable, Telenet, Verizon Communications, Bell Canada, Hong Kong Broadband Network, China Netcom and China Railcom.

VTR, property of Liberty Media and United GlobalCom, is a leader in convergence in Chile, being the only telecommunications company in Latin America, able to offer three broadband services -- TV, Telephony and Internet -- through a technological platform that makes the most of the advantages of integration. VTR's communication services deliver a series of benefits to Chilean homes in terms of quality, price and security. Through its extensive HFC (hybrid fiber coaxial cable) network, it covers a potential market of 1.7 million homes in 43 cities of 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 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, Business Without Boundaries, Succession, Passport and Preside are trademarks of Nortel Networks.

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