Southern Cross, Nortel Trial 40G

WELLINGTON, New Zealand -- Southern Cross Cables and Nortel(1) (OTCBB: NRTLQ) have successfully trialed ground-breaking 40G optical technology across an ultra long distance submarine cable to prove that available bandwidth can be quadrupled without the need for costly re-engineering of the undersea network. The trial paves the way for a more cost-effective means for upgrading submarine networks around the world, which will help add network capacity needed to support growing demand for high-speed international Internet traffic without the need and expense to lay new cable systems.

The Southern Cross network provides the major link for Internet traffic from Australia, New Zealand and Fiji to the US, as well as linking Hawaii to the US mainland. In 2008, Southern Cross upgraded its terrestrial optical network across the US West Coast with Nortel's 40G technology, giving its customers the means to serve bandwidth-intensive applications like high-definition video at a lower cost than has been possible until now.

The recently completed trial takes the technology into uncharted waters. Following the successful deployment of its land-based network, Southern Cross wanted to test the performance of Nortel's 40G submarine solution over two of its most demanding routes. The first trial was conducted over a 4,200km submarine segment between California and Hawaii. The second even more demanding trial was conducted over Southern Cross' longest route, 8000km between Auckland, New Zealand and Hawaii. On both the trials Nortel equipment was simply added to both ends of the third-party submarine cable, with Nortel able to demonstrate the ability to provide over four times the bandwidth capacity without the need to replace or upgrade the submarine cable or undersea repeaters.

"Nortel's 40G technology provides the region's major broadband providers like Southern Cross the means to supply their customers with the network scalability they need well into the future," says Anthony McLachlan, vice president, Carrier Networks, Nortel Asia. "Put simply, this means a better service for both domestic and commercial users, and it enables the creation of additional revenue streams for providers by fast tracking their ability to sell additional bandwidth. With this milestone, Nortel reinforces its position as a lead contender in the resurgent submarine terminal market."

The trial further demonstrates Nortel's unique ability to work with existing cables and amplifiers from other vendors, providing a cost effective bandwidth expansion solution for terrestrial and submarine network operators, regardless of their existing infrastructure. The solution delivers four times the capacity of today's 10G networks at a fraction of the cost of laying new cables.

With 49 wins to date for its 40G solution, Nortel has been leading the industry in 40G shipments for the past three quarters, including a 41 percent share in Q1 2009 based on the Dell'Oro Group. In Asia, Nortel has deployed networks with leading service providers in Japan, Korea, India, Indonesia, Singapore and New Zealand. Nortel is also a leader in the development of 100G solutions, with eight successful 100G field trials already announced and availability of the Nortel 100G solution planned for later this year.

Nortel's trial with Southern Cross is based on Nortel's flagship OME 6500, an optical convergence platform that supports transponding, TDM and Ethernet switching on a single device, giving service providers a smooth migration to a reliable and scalable Ethernet infrastructure while maintaining minimal infrastructure costs. The OME 6500 features Nortel's unique coherent 40G Adaptive Optical Engine featuring advanced digital signal processing that supports fibre spans of up to 9,000 kilometers without the need for costly regeneration equipment. OME 6500 has been deployed in over 200 networks globally, including with Verizon Business across Europe and Asia.

Southern Cross Cables Ltd.

Nortel Networks Ltd.