Volkswagen China Deploys Nortel Solution for Reliable, Efficient Emplo

    Business Editors/Technology Writers

    BEIJING--(BUSINESS WIRE)--Feb. 2, 2005--Volkswagen Group China (VW China), the leading car manufacturer in the China market, has deployed at its new headquarters in Beijing a Gigabit Ethernet solution from Nortel (NYSE:NT)(TSX:NT) designed to provide improved employee communications at lower costs through a high-performance local area network (LAN).
    The network supports enhanced communications and collaboration for up to 400 employees. It includes a suite of advanced data and voice services including Internet Protocol (IP) telephony, fast and secure access to the corporate data center, high-speed Internet access, file sharing and multimedia collaborative tools.
    Designed to provide the highest levels of network performance, security and reliability, Nortel's Gigabit Ethernet LAN solution connects the switches and servers throughout VW China's new headquarters building, including Data Center database and application servers.
    "Nortel is gratified to be able to support VW China in meeting their business objectives with our high-performance, reliable and secure networking infrastructure," said Stephen Tsui, president, Enterprise Networks, Greater China, Nortel. "Our solution provides the capability to deliver voice, data and multimedia services over the same platform. This not only positions VW to increase workforce efficiency, but also to drive reduced operating costs with a simplified network structure and ease of manageability."
    Nortel has been supplying data networking solutions to Volkswagen for more than a decade, providing strong support to VW's business across European and Asian markets with industry-leading Ethernet switching, security and network management products.
    The Gigabit Ethernet solution is designed to ignite global commerce by providing the capability to connect more closely with customers and partners and among employees. It is also planned to enhance the human experience with the ability to share IP multimedia, thus allowing people to communicate across many devices via their preferred means.
    VW China has deployed Nortel's Ethernet Routing Switches 8600, 8300 and 5510 (formerly known as Passport 8600, Passport 8300 and BayStack 5510) to provide Gigabit Ethernet connectivity to the network. Nortel's Ethernet Switching is designed to support mission critical applications with the required intelligence, performance, security and reliability from the network edge through the core, allowing enterprises to achieve better productivity and enhanced user satisfaction.

    About Volkswagen Group China

    Volkswagen was one of the first international carmakers to venture into China. The first car producing joint venture Shanghai Volkswagen was founded in 1984; in 1990 the joint venture agreement for FAW-Volkswagen was signed. Currently Volkswagen is present in China with 15 corporate entities, among them the vehicle-producing joint ventures Shanghai Volkswagen and FAW-Volkswagen in China's northeastern city of Changchun. Together with its imported cars the model range in China includes the brands Volkswagen, Audi, Skoda, Bentley and Lamborghini. Further information can be found at www.volkswagen.com.cn.

    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 August 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, the Globemark, Passport and BayStack are trademarks of Nortel Networks.
    Use of the terms "partner" and "partnership" does not imply a legal partnership between Nortel and any other party.

--30--LR/da*

CONTACT: Nortel Joyce Zhong, +8610 6510 7132 luzh@nortel.com or Angelika Kempf, +44 1628 43 7340 angelika.kempf@nortel.com or Pat Cooper, 425-450-7523 pat.cooper@nortel.com

KEYWORD: TEXAS CHINA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: TELECOMMUNICATIONS NETWORKING INTERNET E-COMMERCE AUTOMOTIVE PRODUCT MARKETING AGREEMENTS SOURCE: Nortel

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