Takamatsu Shopping Mall Trials Nortel Wireless Technology for Smart Card Use

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TOKYO, Oct. 2 -- Takamatsu City Shopping Arcade, the longest covered shopping mall in Japan, is trialing Nortel(x) (NYSE/TSX: NT) wireless broadband technology to provide mobile Internet access, VoIP and smart card transactions for businesses and customers.



Nortel's Wireless Mesh Network will enable instant transfer of transaction data for the new IruCa smart card - a fare collection system for the Takamatsu-Kotohira Electric Railroad (KOTODEN) that can also be used for shopping as well as for bus and train travel. The Nortel solution will also provide high-speed wireless Internet access and VoIP services in the 2.7-km, 800-business arcade for wireless-enabled laptops and other communications devices such as PDAs. Nortel is working with channel partner NextCom in deploying and integrating the system for the Takamatsu trial.

"The use of smart cards for transport and shopping is a growing trend in Japan as the Ministry of Economy, Trade and Industry (METI) begins looking at widespread adoption of the technology for a broad range of commercial and e-government services such as drivers' licenses and passports," said Nick Vreugdenhil, president, Japan, Nortel. "Takamatsu City Shopping Arcade selected Nortel's broadband wireless technology for this trial because wireless mesh coverage offers a cost-effective alternative to wireline infrastructure for transfer of IruCa card transaction data from the card readers in shops to the smart card's central settlement system."

The Takamatsu wireless mesh trial is a key component in a national "Digital Community Demonstration Experiment" project driven by METI to continue Japan's transformation into the world's most advanced IT nation. METI expects the Takamatsu City trial to help demonstrate how digitization can enhance convenience of shopping and traveling within the city, and help revitalize the economy of the Kagawa prefecture region bordering the Seto Inland Sea.

The Digital Community Demonstration Experiment for 2006 is being managed by Nippon Telegraph and Telephone West Corporation (NTT West) and will be featured at the Platform Business Area of the CEATEC JAPAN 2006 industry showcase and exhibition held 3-7 October at Tokyo's Makuhari Messe.

Nortel's Wireless Mesh Network solution uses wireless links - based on Wi-Fi technology - to provide secure, seamless access to wireless broadband services.

Nortel's Wireless Mesh network currently provides seamless and secure anytime, anywhere communications for students and faculty at the University of Tsukuba, one of Japan's major national universities. The solution was also granted the Best of Show Award, the special award in the mobile wireless product category, at the Interop Tokyo 2006 trade show and exhibition.

Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries. Nortel was the industry's first supplier with wireless networks operating in all advanced radio technologies and is the only end-to-end provider of all next generation wireless solutions. Nortel's leadership in wireless data networks coupled with its enterprise strategy of delivering seamless voice, data, multimedia and converged IP-enabled solutions will allow businesses and consumers to enjoy a seamless, mobile broadband experience.

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. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people with information. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at http://www.nortel.com/. For the latest Nortel news, visit http://www.nortel.com/news.

Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Nortel's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different. Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following (i) risks and uncertainties relating to Nortel's restatements and related matters including: Nortel's most recent restatement and two previous restatements of its financial statements and related events; the negative impact on Nortel and NNL of their most recent restatement and delay in filing their financial statements and related periodic reports; legal judgments, fines, penalties or settlements, or any substantial regulatory fines or other penalties or sanctions, related to the ongoing regulatory and criminal investigations of Nortel in the U.S. and Canada; any significant pending civil litigation actions not encompassed by Nortel's proposed class action settlement; any substantial cash payment and/or significant dilution of Nortel's existing equity positions resulting from the finalization and approval of its proposed class action settlement, or if such proposed class action settlement is not finalized, any larger settlements or awards of damages in respect of such class actions; 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any reduction in Nortel's operating results and any related volatility in the market price of its publicly traded securities arising from any decline in its gross margin, or fluctuations in foreign currency exchange rates; any negative developments associated with Nortel's supply contract and contract manufacturing agreements including as a result of using a sole supplier for key optical networking solutions components, and any defects or errors in Nortel's current or planned products; any negative impact to Nortel of its failure to achieve its business transformation objectives; additional valuation allowances for all or a portion of its deferred tax assets; Nortel's failure to protect its intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; changes in regulation of the Internet and/or other aspects of the industry; Nortel's failure to successfully operate or integrate its strategic acquisitions, or failure to consummate or succeed with its strategic alliances; 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any negative effect to Nortel of the need to make larger defined benefit plans contributions in the future or exposure to customer credit risks or inability of customers to fulfill payment obligations under customer financing arrangements; any negative impact on Nortel's ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and further declines in the market price of Nortel's publicly traded securities, or any future share consolidation resulting in a lower total market capitalization or adverse effect on the liquidity of Nortel's common shares. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form 10-K/A, Quarterly Report on Form 10-Q and other securities filings 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.

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