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(NT.TO) Chunghwa Telecom Upgrading GSM Network Using Technology from Nortel Networks; Expanding Capacity, Adding Services under US$64 Million Agreements Signed in June, August 2003

Posted on: Monday, 29 September 2003, 06:00 CDT

TAIPEI, Taiwan--(BUSINESS WIRE)--Sept. 29, 2003--Chunghwa Telecom is expanding the capacity of its island-wide GSM (Global System for Mobile Communications) digital cellular network to more than 7.5 million subscribers using core and access technology from Nortel Networks (NYSE:NT)(TSX:NT).

Under agreements signed in June and August 2003 and collectively estimated at US$64 million, Nortel Networks is deploying radio, core switching and intelligent network equipment for Chunghwa Telecom to support GSM/GPRS (General Packet Radio Service) wireless voice and data services with carrier-grade network reliability.

The agreements also include upgraded system software that will help position Chunghwa Telecom to drive new revenue opportunities through delivery of advanced wireless services.

"Nortel Networks GSM wireless infrastructure technology will enable us to increase our network traffic handling capacity and allow us to accommodate accelerating subscriber growth in Taiwan," said Chin-Yi Yue, vice president, Chunghwa Telecom. "The upgrade will improve radio frequency (RF) coverage, prepare for seamless 2G/3G interworking, and provide a platform for new revenue-generating services like Personalized-Ring Back Tone, Prepaid Short Message Service, and others."

"We are pleased to continue our long-standing relationship with Chunghwa Telecom," said Jackson Wu, managing director, Taiwan, Nortel Networks. "Nortel Networks built the initial GSM mobile network for Chunghwa Telecom in 1994. Nortel Networks technology is designed to position leading operators like Chunghwa Telecom to meet growing subscriber demand and to lay the foundation for next generation data opportunities."

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

Established in July 1996, Chunghwa Telecom is Taiwan's leading telecommunications company, operating both domestically and internationally. The carrier also invests in related businesses and other ventures as authorized by Taiwan's Ministry of Transportation and Communications, and was awarded a 3G WCDMA license in February 2002. Chunghwa Telecom's range of services covers local, long distance and international calls, GSM mobility, data communications, Internet services, broadband networking, satellite communications, intelligent networking, mobile data and multimedia broadband. Chunghwa Telecom can be found on the web at www.cht.com.tw.

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 and continued reductions in spending by our customers; 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 integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact on our gross margins and other impacts 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; the dependence on new product development and our ability to predict market demand for particular products; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of customer financing and commitments; the impact of a consolidation of our common shares; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of our purchase contracts; 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 outcome of our asset and liability review; the future success of our strategic alliances; risks related to our defined benefit plans; the impact of additional valuation allowances for all or a portion of our deferred tax assets required if market conditions further deteriorate or future results of operations are less than expected; an inability of our subsidiaries to provide funding to the respective parent companies; restrictions on our cash as cash collateral if satisfactory arrangements for alternative support for certain obligations are not in place; and the adverse resolution of litigation and intellectual property disputes. 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.

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