Southern Cross and Nortel Achieve 8,000km 40G Milestone on Submarine Cable

WELLINGTON, NEW ZEALAND--(Marketwire - Aug. 12, 2009) - Southern Cross Cables and Nortel(1) 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.

About Southern Cross
Southern Cross Cable Network provides the fastest, most direct, and most secure international bandwidth from Australia, New Zealand and Hawaii to the heart of the Internet in the USA. The two Southern Cross submarine communications cables were first commissioned in November 2000 and January 2001 at a cost of USD1.3 billion. They provide Australasian broadband users with international connections to the US West coast where global Internet hubs are located. The Southern Cross Network has been engineered until 2025. In 2001 total installed capacity was 80 Gbps, in January 2003 the total network was expanded to 480 Gbps and by end-2008 total installed capacity was 780 Gbps. With new technology continually improving potential transmission speeds, the ultimate size of the Southern Cross Cable Network is likely to considerably exceed the current limit of 2.4 Tbps.

Southern Cross Cable Network is owned by Telecom NZ (50%), Singtel-Optus (40%) and Verizon Business (10%). The company has offices in Bermuda, Sydney, Auckland and Wellington. For more information visit Southern Cross at:
http://www.southerncrosscables.com(2)

About Nortel
Nortel delivers communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit 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 from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K, Quarterly Reports 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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