BEIJING -- Shandong Unicom, a subsidiary of leading telecommunications network operator China Unicom, has awarded a contract to Nortel Networks* NYSE/TSE: NT to build a new provincial optical backbone network intended to help address growing demand for high-speed mobile Internet services and e-commerce applications.

Under this contract, Nortel Networks will deploy Nortel Networks OPTera* Connect DX Optical Switches and OPTera Long Haul 1600 Optical Line System for Shandong Unicom. This is expected to extend the reach of Shandong Unicom's dense wavelength division multiplexing (DWDM) solutions, and to support wireless, fixed-line and data services. The backbone project will link major cities and counties in Shandong Province with broadband transmission capacity to help increase efficiency of e-commerce and data services, and to help Shandong Unicom drive reduced capital and operating costs.

Deployment is scheduled to begin in May 2003. "This contract further demonstrates the strength and breadth of Nortel Networks technology, and our leading position in delivering high-performance networks to customers across China," said Robert Mao, president and chief executive officer, Nortel Networks China. "This is, in fact, our fundamental strength - building highly reliable, future-proof networks for cost-effective provisioning of new and value-added services."

Nortel Networks is also working closely with Shandong Unicom to deploy Wireless Data Networks to address growing demand for advanced wireless communications services. Nortel Networks announced CDMA and GSM network expansion contracts with Shandong Unicom in March and April of 2003. OPTera Long Haul 1600 offers native data interfaces and flexible add-drop' capabilities to help service providers optimize their networks and cost-effectively provision end-to-end optical connectivity. OPTera Connect DX provides bandwidth and connection management capabilities with grooming capability down to the STS-1/VC4 level. This flexible platform also supports termination of multiple four-fiber and two-fiber BLSR/MS-SPRing rings or UPSR/SNCP rings.

With advanced capabilities like integrated DWDM interfaces, enhanced interface density, and Head-End-Ring-Switching (HERS), OPTera Connect DX is designed to give service providers high value, and to position them to drive network-wide cost savings. To date, Nortel Networks has won more than 50 contracts in China for 10 gigabit and DWDM optical solutions spanning more than 60,000 kilometers. Nortel Networks ranked #1 globally in 2002 in the optical transport and long haul DWDM markets, according to the Dell'Oro Group.

China Unicom Ltd.

Nortel Networks Corp.