NORTEL NETWORKS CONFIDENTIAL PG 1

Deliver Your Solutions Through Carrier

Networks & Watch Your Profit Grow!

May 16, 2007

William StreitIBM

Steven MaroulisNortel

2

Agenda

The Converged Network Opportunity

The Nortel/IBM Alliance

Nortel Introduction / Focus

Key Applications Focus

The SOA Opportunity

Service Delivery Platform Focus / Tooling

The Ecosystem Opportunity for Partners

Partner Program

Benefits / Responsibilities for Ecosystem Partners

3

Telecom Challenges

Reduce operational expense

Find new sources of revenue and profit

Move to next generation networks

Improve the customer experience

Source: 2006 IBM Global CEO Survey

4

Telecom Challenges

Reduce operational expense

Find new sources of revenue and profit

Move to next generation networks

Improve the customer experience

New competitors

Converging ecosystem

+

…with Innovation often being driven by new competitors and ecosystem players

5

The Changing Environment: Then and Now

1 Product

1 Technology

Own the process top to bottom

Multiple services ondifferent technologies

Voice, Text, Video, Data

Collaboration

Then

Now

6

• 100+ Nortel Application Developer Partners

• Wide variety of devices and clients

• Standards Compliant

• Mass Market Availability

• Best-In-class service enablers

• Pre-integrated solutions for rapid development

Ecosystem

Nortel and IBM IMS Alliance Overview

• Carrier VoIP and Softswitch Leader

• SIP Communications Experience

• Wireless and Wireline Core IP and Access Networks

• Network Security Expertise

• Professional Services

++

…to Deliver an End-to-End IMS Solution!

• Service Delivery Platforms Experts

• Service Creation Environment

• Industry Leader in Middleware & SOA

• Industry Leader in Servers

• Industry Leader in Systems Integration

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Nortel Carrier Portfolio Strategy

Develop a horizontally integrated Services Delivery environment that allows

service deployment independent of underlying network architecture (PSTN,

Wireless, Cable, IMS)

Enable the migration of existing VoIP network elements to IMS to minimize

CAPEx

Core

Wir

ele

ss

Data

Wir

elin

e

Network Applications

IMS, Application Enablers &

SOA Mediation

SOA / Web Services Applications

Access

En

terp

rise

8

Nortel VoIP and Multimedia Solutions

MS

TDMPeripherals

Hybrid Interworking

IP to othercarriers

SuperclassSoftswitches

MultimediaApplications

ServerMedia Server

ElementManagement

SS7Network

CS 2000Series

AS5200 MS

2000 IEMS

IWGateway

MG 15000

MTA

IAD

CMTS

MCS Client(multimedia

)

IP lines(Centrex IP)

VoBBCable

Legacy Peripheralsand remotes

TR-08, GR-303, LCM/RLCM

TDM TrunksCarrier or Enterprise

Standard Line InterfacesPOTS, xDSL, video

AccessGateway

TrunkGateway

IP PBXKey SystemH.323 Terminal

(VoIP VPN)

H.323 SIP

Border Control Point H.248

TGCP H.248H.248MGC

PSIP

NCS

SIPUnistim

IP Network

MG9000

ENET

Class 5Residential /

Business

Class 4 Long Distance

Enterprise

Carrier Hosted

UniversalSignaling

Point

CS 1500Series

CS 1500Gateway

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Nortel SIP / VoIP / IMS leadership (March 2007)

Nortel ranked #1 in Carrier IP Telephony with 23% share during Q3 '06 (note: we ranked 9 points above our closest competitor). - Source: Dell'Oro, IP Telephony Carrier Total Worldwide (3Q06)

Nortel has sold nearly 40,000,000 Carrier VoIP ports worldwide- Source: Nortel sales data though 1Q06 Trunk ports + Class 5 RTUs

Nortel has over 1000 SIP Enabled Systems in-service in Carrier Networks globally- Source: Nortel- - CS 2000 Capable of SIP – 319 "Live" in service (183 XA-Core based CS 2000 and

136 Compact PCI based CS 2000 – Compact)- - DMS-10 600 Series Capable of SIP - 677 nodes in service - - MCS 5200 with SIP – 87 nodes in service

Nortel Global Services Team has planned and installed 1000s Carrier VoIP and Multimedia systems worldwide.- Source: Nortel Global Services Team

Nortel is number one vendor worldwide for carrier VoIP solutions

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• #1 in Worldwide Carrier Voice over Packet 2005 (Dell’Oro)

• #1 in Worldwide Softswitches 2005 (Dell’Oro)• #1 in Worldwide Media Gateways 2005 (Dell’Oro)• #1 in Worldwide Voice over IP Gateways 2005

(Dell’Oro)• #2 in Worldwide Voice over ATM Gateways 2005

(Dell’Oro)

Largest telecom provider in US to replace TDM network with Packet network (Verizon)

First North American deployment of carrier grade Local Tandem VoP network (Verizon)

First deployment full-featured long distance VoIP network - US (MCI)

First deployment of significant Class 4/5 local network transformation to VoP (Sprint)

First global cable VoIP deployment (Kabel BW)

23 out of 48 cable operators building their own VoIP networks have selected Nortel

Q3 2006 NGN Market ShareOverall Carrier Packet Voice (revenue)

Nortel

Cisco

Siemens

Sonus

Ericsson

Huawei

Lucent

Others

Others 30%

Sonus 7%

Nortel 23%

Cisco 14%

Huawei 7% Siemens 7%

Ericsson 7%

Lucent 5%

Nortel is the overall global leader in the Carrier VoIP Market.source: Dell’Oro Group “Q3 2006 IP Telephony Carrier Market Share”