OTTAWA -- Building momentum with its rural market network evolution initiative announced in August 2002, Nortel Networks (NYSE:NT)(TSX:NT) has signed up 175 rural service providers for the latest enhancements to Nortel Networks DMS-10 carrier-class switching system and won new contracts with two independent operating companies (IOCs). This initiative is intended to help service providers and IOCs provide rural market subscribers the same high-quality, high-speed Internet services available in urban centers. The DMS-10 enhancements - already being deployed by rural service providers representing approximately 650,000 lines in North America - were designed to help simplify networks, drive reduced operational and maintenance costs, and migrate to fully-packetized networks when the service providers are ready. The new contracts are with IOCs Crosslake Communications, which serves central Minnesota, and Kentucky-based Mountain Telephone. "Nortel Networks continues to strategically invest in technology and initiatives designed to better meet the needs of our rural market service provider customers," said Sue Spradley, president, Wireline Networks, Nortel Networks. "Our rural market network evolution initiative is intended to help our large base of rural market customers to evolve their networks to a more cost-effective packet infrastructure at their own pace, preserving existing investments and laying a foundation for future multimedia services," Spradley said. "We are very pleased to see our customers responding so quickly and in such great numbers." Nortel Networks Corp.