Verizon Picks Nortel for Class 5 VOIP

NEW YORK -- Verizon Communications (NYSE:VZ) this year will dramatically accelerate the evolution of its nationwide wireline network to packet-switching technology and has selected Nortel Networks (NYSE:NT)(TSX:NT) as its Voice Over Internet Protocol (VoIP) equipment provider.

Verizon will begin deployment of the new Nortel Networks equipment in its local and long-distance voice wireline networks later this year. Verizon plans to offer one of the industry's most comprehensive suites of VoIP and multimedia services, providing consumers and businesses in markets throughout the United States with communications capabilities that dramatically increase functionality, mobility and productivity. Verizon expects that its next-generation network will be the nation's largest converged network, capable of simultaneously handling voice, data and video transmissions.

Nortel Networks and Verizon have executed an interim Letter of Agreement (LOA) covering the initial terms of the arrangement. The parties expect to replace this LOA with a five-year agreement within the next few months.

"Construction of this next-generation wireline network will drive new revenue growth for us as we expand the services we can offer to customers nationwide, as well as make our existing network more efficient while maintaining our high level of network reliability," said Lawrence T. Babbio Jr., Verizon vice chairman and telecom president. "This move is as significant as when the industry began moving from analog to digital technology in the 1980s."

Paul Lacouture, Verizon president-Network Services Group, said, "We are literally taking what is known in the industry as the Public Switched Telephone Network and transforming it. The time is right for this move."

"This is an aggressive move by Verizon to deliver on the industry's vision of convergence, and a testament to Nortel Networks global vision of transforming networks, eliminating boundaries, and offering service providers a foundation for value-rich services prized by both consumers and businesses," said Sue Spradley, president, Wireline Networks, Nortel Networks. "We are on the edge of a new era in telecommunications - one in which superior delivery of integrated voice, video, and data will enhance how, when and where people communicate with full mobility. Our VoIP and multimedia technology will enable Verizon's customers to make a video call, share electronic documents and send text messages in one environment with ease."

Verizon Communications Inc.

Nortel Networks Corp.