Verizon Introduces Voice Transmission Over Packet Switching Provided by Nortel Networks

NEW YORK -- Verizon (NYSE: VZ) has introduced packet switching to transmit voice phone calls with the successful deployment of Nortel Networks* (NYSE/TSX: NT) packet-switching equipment in large Verizon switching centers in New Jersey and Florida.

The move is part of Verizon's overall effort to deploy the industry's most advanced technology in its nationwide network, continually improving service and positioning the company's network to provide integrated voice and data services.

The deployments -- Verizon's first step toward widespread deployment of packet-switching technology in its voice network -- represent the largest application of packet-switching technology for voice transmission by a local exchange carrier in North America. Thus far, the New Jersey packet-switching deployment has successfully completed over 1.8 million voice phone calls.

The deployments, designed to evaluate the reliability of packet technology, pave the way for the expanded use of packet-switching technology for future voice transmission needs. The technology is designed to provide Verizon with faster call routing, greatly expanded network capacity and the ability to deliver new services, while enabling a seamless transition for Verizon customers.

This use of the packet-switching technology to carry voice calls is known as voice trunking over ATM switches, or VToA. ATM stands for Asynchronous Transfer Mode, a high performance, cell-oriented switching and multiplexing technology, historically used for data applications.

"Packet-switching technology will enable Verizon to provide customers with all the high quality services they have today, and realize efficiencies which do not exist in today's circuit-switching environment," said Phil Harrington, Verizon's VToA program manager. "It is very important to us that this network transition be absolutely seamless to our customers, and that it enable the delivery of mission-critical services with very high reliability. We're also planning to deploy this technology at a number of new locations over the next 18 months."

"With this deployment, Verizon is in an excellent position to efficiently accommodate growth and build the foundation for the delivery of new voice, data and video services in the future," said Sue Spradley, president, voice over Internet Protocol (VoIP) for Nortel Networks. "Nortel Networks is in a unique position to effectively enable this migration because of our detailed understanding of network design and service delivery, our solid circuit-to-packet migration strategy, and our comprehensive voice over IP portfolio."

Packet switching permits groups of messages -- voice or data -- from many different sources to share the same communications line, resulting in more efficient use of existing transmission capacity and lines. This provides a significant advantage over circuit switching --the technology used in telecommunications networks today -- which uses communications lines that are dedicated to the same source and destination. Another advantage of packet switching over circuit switching is that it more readily lends itself to a distributed network, which is a more survivable network infrastructure in the event of damage to the network.

During the initial Verizon VToA deployment, voice calls are being transmitted through major regional call- and data-switching centers known as tandems. The two Verizon tandems are located in Newark, N.J., and Tampa, Fla.

The two switching centers used products from Nortel Networks VoIP portfolio including the Succession* Communication Server 2000 softswitches, Succession Multi-service Gateway 4000 and Passport* 15000 Multiservice Switches for ATM transport.

VToA technology also offers the potential for a cost-effective way to migrate to a Voice over IP platform, if the market and future technology justify that move at some time in the future.

Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon is the largest phone company in the United States and the nation's largest wireless company, with 133.8 million access line equivalents and approximately 29.6 million wireless customers. Verizon is also the largest directory publisher in the world. With more than $67 billion in annual revenues and nearly 248,000 employees, Verizon's global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.

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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 Metro Networks, Wireless Networks and Optical Long Haul 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.

*Nortel Networks, Succession and Passport are trademarks of Nortel Networks.

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 increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance 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.