Nortel Networks, EADS to Redefine Telecommunications Alliance
PARIS - Nortel Networks [NYSE/TSE: NT]
European Aeronautic Defence and Space Company (EADS) and have entered into a series
of agreements to realign their telecommunications operations and business focus in key markets.
The agreements relate to a number of transactions including the transfer to EADS Defence
and Security Networks (EDSN) of Cogent* Defence Systems, a UK leader in defence and security
telecommunications systems and currently a division of a Nortel Networks UK subsidiary, and
the current German-based communication networks division of EADS, VEKN, which specialises in
defence tactical networks. Both of these transfers to EDSN are subject to usual regulatory
approvals and other pre-conditions, satisfaction of which are currently underway and expected
to be completed within the next 60 days.
The agreements also relate to the transfer to EDSN of the M6500 PBX business from Matra
Nortel Communications, a Nortel Networks subsidiary in which EADS is a shareholder. EDSN
will assume responsibility for the M6500 product and technology, including its path to
Internet Protocol (IP) telephony. This is a core technology at the heart of EDSN security solutions.
These agreements are part of EADS plans to strengthen its telecommunications organisation,
created in March 2001 within the EADS Defence and Civil Systems Division, which focuses on
defence and security markets. EADS aims to turn EDSN, an EADS subsidiary in which Nortel
Networks is a shareholder, into a global leader in telecommunications for defence and
security systems based on civilian technologies.
Nortel Networks has recognized that a more specialised approach to the defence market will
benefit its customers in this area. Nortel Networks will continue to develop Voice over IP
solutions for enterprises through Nortel Networks Meridian* portfolio, with approximately
43 million units deployed worldwide. Nortel Networks is focusing on Voice over IP as one
of five core markets identified in a “Work Plan” implemented earlier this year. This Work
Plan aligns Nortel Networks against changing market dynamics by streamlining costs and
sharpening the company’s business focus.
According to Thomas Enders, member of the Executive Committee, EADS, and manager of the
Defence and Civilian Systems Branch, “The closing of these transactions will provide EDSN
with the means to fulfill its ambitions, by providing it with a technological advance in
the field of IP solutions, securing access to key technologies, while controlling the
development path of its own product lines, and strengthening its position in major
European markets, primarily Germany and the UK.”
Nortel Networks strategic goal is to support our service provider and enterprise customers,
enabling them to capitalise on the high-performance Internet through our industry leading
Wireless Internet, Metro Optical, Optical Long Haul, Intelligent Internet and Voice over
IP platforms, said Pascal Debon, president, Nortel Networks EMEA (Europe, Middle East, Africa.)
France remains a vital market for Nortel Networks, where we will continue to focus and
drive our business forward.
EADS N.V (European Aeronautic Defence and Space Company) is the leading European group and
worldwide number three in the fields of aeronautics, space, and defence. It covers the fields
of its founding partners, Aerospatiale Matra (France), Construcciones Aeronauticas SA (Spain),
and DaimlerChrysler Aerospace AG (Germany). The EADS group went public in Paris, Frankfurt,
and on the Spanish markets on the day it was created (10 July, 2000). Visit the EADS web
site at www.EADS.net.
Nortel Networks is a global leader in networking and communications solutions and infrastructure
for service providers and corporations. The Company is at the forefront of transforming how
the world communicates, exchanges information and profits from the high-performance Internet
through capabilities spanning the Optical Internet, Wireless Internet, Intelligent Internet
and IP (Internet Protocol) technologies and services. Nortel Networks does business in more
than 150 countries and can be found on the Web at www.nortelnetworks.com.
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 severity
and duration of the industry adjustment; the sufficiency of our restructuring activities,
including the potential for higher actual costs to be incurred in connection with restructuring
actions compared to the estimated costs of such actions; fluctuations in operating results
and general industry, economic and market conditions and growth rates; the ability to recruit
and retain qualified employees including at the most senior management levels; fluctuations
in cash flow, the level of outstanding debt and debt ratings; the ability to make acquisitions
and/or 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; 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 telecommunications industry; the dependence on new product development;
the uncertainties of the Internet; the impact of the credit risks of our customers and the
impact of increased provision of customer financing and commitments; stock market volatility;
the entrance into an increased number of supply, turnkey, and outsourcing contracts which
contain delivery, installation, and performance provisions, which, if not met, could result
in the payment of substantial penalties or liquidated damages; the ability to obtain timely,
adequate and reasonably priced component parts from suppliers and internal manufacturing
capacity; the future success of our strategic alliances; and the adverse resolution of
litigation. For additional information with respect to certain of these and other factors,
see the reports filed by Nortel Networks Corporation and Nortel Networks Limited with the
United States Securities and Exchange Commission. Unless otherwise required by applicable
securities laws, Nortel Networks Corporation and Nortel Networks Limited disclaim 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 Cogent and Meridian are trademarks
of Nortel Networks.
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