Emergia selects Nortel Networks to extend optical network into Europe.

M2 PRESSWIRE-14 May 2002-NORTEL NETWORKS: Emergia selects Nortel Networks to extend optical network into Europe (C)1994-2002 M2 COMMUNICATIONS LTD

RDATE:05142002

MADRID, Spain -- Emergia Hispana S.A., part of the Telefonica Group, has selected Nortel Networks* [NYSE/TSE: NT] to provide optical networking equipment and services. This will be the first optical networking project for Emergia in Europe, and will encompass extension of its U.S. and Latin American infrastructure into Europe. The first phase is expected to initially connect London, Lisbon and Madrid by June 2002.

Nortel Networks was previously selected by Emergia (December 1999) to build Latin America's first terabit optical network across that continent, and to connect Telefonica's networks in Latin America to the United States and the Caribbean. "We are very satisfied with the quality and service we continue to receive from Nortel Networks," said Jacinto Diaz, chief executive officer, Telefonica International Wholesale Services. "The completion and operational service of Emergia's Latin American ring has been a success, and we expect to continue with that success at the new expansion of our network in Europe."

Emergia's high capacity fiber optic ring, which provides broadband connectivity between Latin America, the United States and Europe, has been integrated into Telefonica International Wholesale Services, a business unit of Telefonica Group that provides wholesale communications services at a global level. Telefonica International Wholesale Services has an active presence in more than 250 cities in 20 countries; a network of more than 200,000 kilometers of fiber optics and 1,500 metropolitan rings; an international backbone; and more than 150 direct connections with international carriers. "Our next generation optical network equipment is redefining the economics of networking, driving substantial capital and operational expenditure savings for our customers," said Jordi Casamitjana, managing director, Iberia, Nortel Networks. "Our leading DWDM transport solutions offer service providers like Emergia the lowest cost-per-connected bit, while significantly enhancing time-to-market," Casamitjana said. "We have been working with Telefonica for more than 10 years, supporting its efforts to provide the most effective services to its customers."

This new deal strengthens the relationship between Nortel Networks and the Telefonica group, not only in Spain, but also in Latin America and Europe. In addition to optical equipment, Nortel Networks has been selected this year to supply Telefonica M?viles with radio access equipment for build out of its third generation (3G) Universal Mobile Telecommunications System (UMTS) networks in Spain and Germany. Emergia plans to use Nortel Networks OPTera* Connect DX optical switch and OPTera Long Haul 1600 Optical Line System to integrate with Nortel Networks existing optical footprint with Emergia. This integrated, 10 gigabits-per-second (Gbps), SDH based solution features the industry's highest capacity, open optical interfaces for maximum flexibility, and optimal interconnection to Internet routers and switches. Nortel Networks will also provide its Preside* network management solution for end-to-end network visibility, provisioning and maintenance of Emergia's optical network. OPTera Connect DX enables service providers and carriers to increase network capacity, provide flexible services, improve connection and network management capabilities, and enhance network reliability. OPTera Connect DX is the most widely deployed 10 Gbps optical switch in the world with over 5,000 network elements in service. OPTera Long Haul 1600 is a widely deployed DWDM transport platform - with over 12,000 network elements installed worldwide - that enables service providers to optimize their networks through data native interfaces and flexible add-drop capabilities. 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 and Enterprise 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.

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 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.

* Nortel Networks, the Nortel Networks logo, the Globemark, OPTera and Preside are trademarks of Nortel Networks.

CONTACT: Ben Roome, Nortel Networks Tel: +44 (0)1628 433 113 e-mail: benroome@nortelnetworks.com Jose-Luis Menoyo, Nortel Networks Tel: +34 91 709 4567 e-mail: menoyo@nortelnetworks.com

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