KPN Extends Secure Critical Business Services With Nortel Ethernet Sol

    Business Editors/Technology Writers

    AMSTERDAM, The Netherlands--(BUSINESS WIRE)--Feb. 22, 2005--KPN is now offering data, voice, video and Internet access services over a single, converged network with completion of the first phase of a nationwide Ethernet network deployment using metro Ethernet solutions from Nortel (NYSE:NT)(TSX:NT).
    This secure and reliable network offers KPN business customers cost savings on critical business communications and flexibility to deal with growth and change.
    The first-phase deployment was completed under a supply agreement with Nortel signed in October of 2004. Under this agreement, KPN plans further evolution of its Ethernet service with the addition of a range of Quality of Service offerings, integration with its existing IP (Internet Protocol) virtual private network (VPN) service, and an international Ethernet-VPN (EVPN) service.
    "KPN's evolution of Ethernet-based services is driven by our customers' requirements for scaleable Ethernet-based network solutions and has been developed in close co-operation with Nortel," said John van Vianen, senior vice president, Business Unit Connectivity Services, KPN. "We expect our Ethernet-based service to be an important driver for future growth in our network services portfolio."
    With the new deployment, KPN is now able to offer 'point-to-point' and 'any-to-any' connectivity, multiple service classes, scaleable high-bandwidth fibre optic network access, and national coverage. As a result, KPN's Ethernet solution offers an industry-leading choice for businesses and organisations seeking a single, high-speed, future-proof and cost-effective service to connect their offices.
    "This clearly demonstrates that Nortel and KPN are aligned on Ethernet strategy," said Jean-Luc Panetta, vice president, Optical Ethernet solutions, Nortel. "Our solution combines the reach and reliability of optical networking with the simplicity and cost-effectiveness of Ethernet for delivering voice, video and data services over a single converged infrastructure."
    Ethernet VPNs offer a cost-effective and flexible solution to connect KPN's customers' locations nationally. By extending the Ethernet for local area network (LAN) standard to the wide area network (WAN), multiple customer locations can be connected through VPNs based on native Ethernet technology.
    KPN's Ethernet service enables enterprises to transparently integrate LANs at different locations using high-performance broadband connections scaleable from 10 Megabits per second up to 1 Gigabit per second. In addition, KPN now has the ability to offer 10 Gigabit Ethernet-based services for specific customers.
    "The extended agreement between KPN and Nortel is further proof of the strong relationship between both companies in the deployment of leading-edge solutions," said Wim te Niet, vice president, Carrier Networks, Benelux and Nordics, Nortel.
    The Optical Ethernet solution for KPN includes Nortel Metro Ethernet Routing Switch 8600 equipped with Metro Ethernet Services Module 8668, Nortel Optical Metro 1400 Ethernet Service Module, and Nortel Optical Metro 5200 Multiservice Platform.
    Nortel's Metro Ethernet Routing Switch 8600 delivers high-density, high-performance Layer 2-7 switching, routing and traffic classification. This reliable, secure and intelligent solution is designed to provide increased bandwidth and additional revenue-generating potential for today's application-driven networks.
    Optical Metro 1400 provides 12 10/100Base-T plus two gigabit Ethernet ports for connecting customers. Consistent with the Optical Metro 1000 family, Optical Metro 1400 may be used as a cost-effective way to extend the Optical Metro 3000 backbone. It may also be used as an independent platform to provide Ethernet VPN services, as is the case with KPN.
    Nortel Optical Metro 5200 is a higher scale, survivable platform for metropolitan access and interoffice applications. Strong connection management and ring-to-ring interconnection enable seamless interworking between wavelengths originating on Optical Metro 5100s located on customer premises and core Optical Metro 5200s.

    About KPN

    KPN's international network is a state-of-the-art data/IP backbone with a seamless footprint extending across major business and financial centers in Europe. KPN's EuroRings portfolio delivers a full range of carrier and corporate networking solutions over a high-capacity fiber-optics network. KPN is a telecommunication company that offers a broad range of high-quality, innovative telecommunication services for both the individual and the business market. KPN's core activities include fixed network services in the Netherlands, mobile communication in the Netherlands, Germany (E-Plus) and Belgium (BASE), and IP/data services. At the end of the second quarter of 2004, KPN had 7.6 million fixed telephone customers, 1.6 million Internet customers and 15.6 mobile customers. For more information about KPN, see www.kpn.com.

    About Nortel

    Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

    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 regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal controls over financial reporting; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including breach of its support facility and public debt obligations and Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission ("SEC"); ongoing SEC reviews, which may result in changes to our public filings; the potential delisting or suspension of Nortel's and NNL's publicly traded securities; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions;
    cautious or reduced spending by Nortel's customers; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's 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's 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, which is currently not available, of Nortel's forward purchase contracts; the impact of Nortel's 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; and the future success of Nortel's strategic alliances.
    For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel with the SEC. Unless otherwise required by applicable securities laws, Nortel 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, the Nortel logo and the Globemark are trademarks of Nortel Networks.

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CONTACT: Nortel Ben Roome, +44 1628 43 3113 benroome@nortel.com or Bo Gowan, 972-685-8278 bogowan@nortel.com

KEYWORD: TEXAS NETHERLANDS INTERNATIONAL EUROPE INDUSTRY KEYWORD: TELECOMMUNICATIONS NETWORKING INTERNET E-COMMERCE PRODUCT MARKETING AGREEMENTS SOURCE: Nortel

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