AXTEL Selects Nortel Networks for Next Generation Telephony Services in Mexico (email this article)

MEXICO CITY--(BUSINESS WIRE)--Oct. 5, 2004--Mexican telecom operator AXTEL, S.A. de CV, has chosen Nortel Networks (Company Profile, Past Stories, Case Studies)(NYSE:NT - News; TSX:NT - News) to accelerate the convergence of its voice and data networks over an IP (Internet Protocol) network, positioning the service provider to broaden its service offerings, expand its coverage area and reduce operating costs.

"AXTEL plans to migrate all of its telephony traffic to a voice over IP (VoIP) network," said Alberto de Villasante, vice president, Negotiations, Alliances and Institutional Affairs of AXTEL. "Nortel Networks packet-based convergence solutions will allow us to offer our subscribers IP services that are unique in the market -- services like integrated voice and video communications, secure instant messaging and instant file transfer, while at the same time reducing our capex and network operation expenses."

AXTEL will deploy Nortel Networks Succession Communication Server (CS) 2000 and Nortel Networks Passport Packet Voice Gateway (PVG) to build a single, converged IP infrastructure that will enable AXTEL to offer local and long-distance services by the end of 2004 in Mexican markets where it does not yet have a local presence, such as Saltillo, Aguascalientes, Tijuana and Ciudad Juarez. With design and implementation support from Nortel Networks, the next generation network will position AXTEL to more quickly respond to market opportunities.

In the second phase of the project, AXTEL plans to migrate its voice and data traffic in the markets it currently serves, onto the new IP infrastructure to offer new VoIP services. This includes around 400,000 lines in service, supported by AXTEL's extensive fixed wireless access network.

"Nortel Networks IP solutions allow innovative service providers like AXTEL to simplify and transform their networks into more flexible and powerful infrastructures that can help them speed the deployment of value-rich services to their subscribers while driving down the cost of operation," said Manuel Terrero, vice president, Wireline Networks, Caribbean and Latin America, Nortel Networks.

Nortel Networks Succession CS 2000 Superclass softswitch enables service providers to deliver the full suite of traditional voice services to business and residential customers on a packetized network with voice and data traffic sharing the same communications lines to provide more efficient and cost-effective use of existing transmission capacity. As a trunk gateway, Passport PVG is an integral part of Nortel Networks Carrier VoIP solutions. It offers complete carrier-grade options for long distance, local exchange, wireless and cable operators.

For the entire year 2003 and the first half of 2004, Nortel Networks ranked #1 in the global markets for carrier packet voice and softswitch revenue, according to Synergy Research Group (SRG). Nortel Networks, which has a proven portfolio of products and services for packet voice services, is providing Succession voice over packet solutions to a number of leading operators, including Bell Canada, Cable & Wireless Cayman Islands, Charter Communications, China Netcom, China Railcom, Cox Communications, Hong Kong Broadband Network, MCI, Sprint and Verizon Communications.

AXTEL is a Mexican telecommunications company that provides local telephone services, national and international long distance services, data, internet, virtual private nets, and value added services. Axtel has provided Mexico with a basic telecommunications infrastructure through an intelligent net that offers wide coverage to all markets. At present, it is operating in Mexico City, Monterrey, Guadalajara, Puebla, Leon, Toluca, Queretaro and San Luis Potosi. AXTEL has brought to the market various access technologies that include fixed wireless telephony, point-to-point radio links, point-to-multipoint radio links, and fiber optics, all of which are offered to match the communication solutions that its customers require. Fifty eight percent of AXTEL capital is Mexican. The remaining 42% belongs to foreign investors, among which are, mainly, AIG-GE Capital Latin American Infrastructure Fund (LAIF); AIG Latin American Equity Partners; Blackstone Group; American International Underwriters Overseas Ltd., and Soros Group. For more information, please visit: www.axtel.com.mx.

As a global innovation leader, Nortel Networks enriches consumer and business communications worldwide by offering converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks on the Web at www.nortelnetworks.com or www.nortelnetworks.com/media_center.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events.

Factors which could cause results or events to differ from current expectations include, among other things: the outcome of Nortel Networks independent review and planned restatement or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; cautious or reduced spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal controls; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks ability to integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunicatio ns industry; changes in regulation of the Internet; the impact of the credit risks of Nortel Networks customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of Nortel Networks purchase contracts; the impact of Nortel Networks supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters.

For additional information with respect to certain of these and other factors, see the most recent Form 10-Q/A and Form 10-K/A filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Nortel Networks, the Nortel Networks logo, the Globemark, Business Without Boundaries, Succession and Passport are trademarks of Nortel Networks.