Nortel publshishes LTE patent royalty rates

TORONTO, ONTARIO, May 05 (MARKET WIRE) --
To help accelerate the global adoption of the 4G technology for
high-speed, high-bandwidth mobile communications, Nortel(1) (TSX:
NT)(NYSE: NT) has published a competitive handset royalty rate of about
one percent subject to terms(i) for its portfolio of LTE
standards-essential patents. Nortel's competitive handset royalty rate
for patent value is one of the first to be voluntarily published. Nortel
is providing this information in order to help service providers and
their handset vendors develop business plans for launching LTE, a
wireless technology that can support hotly demanded mobile applications
like social networking, multi-player gaming, and streaming video.

    With initial LTE deployments expected to occur as early as next year,
operators are exploring the business case for investment in the 4G
wireless technology to meet demand for higher-bandwidth mobile services.
Nortel is taking this exceptional step of publishing its competitive
patent royalty rates in order to provide increased transparency and
predictability of IPR costs that could help prevent uncertainties in
handset costs from inhibiting the growth of the 4G market. Removing an
unknown of LTE IPR handset licensing costs is expected to help foster LTE
business cases and reduce the risks of early deployment. Nortel will make
licenses available and is providing royalty information to help simplify
the current guesswork while ensuring that its innovation is rewarded.

    "Nortel believes pioneers and innovators should be entitled to a
reasonable return on their investment in R&D and leading contributions to
the next-generation standard, where not all patents are created equal,"
said John Hoadley, vice president of 4G ecosystem and business
development, Nortel.

    It is Nortel's position that compensation provided through licensing
standards-essential patent claims under fair, reasonable and
non-discriminatory terms (FRAND) should be based on the significance of
the patented technology in the standard and the value of the patented
technology to the licensed implementation. That way, innovators that
develop technological breakthroughs are appropriately rewarded for their
IPR and their portfolio value while standardized technologies can remain
accessible to anyone through licenses on reasonable terms.

    For more than 10 years, Nortel has been at the forefront of the
development of foundational technologies that enable 4G LTE. Nortel is a
key innovator in Orthogonal Frequency Division Multiplexing (OFDM),
Multiple Input Multiple Output (MIMO), Adaptive Modulation and Coding,
Space Time Coding, Channel Coding, Automatic Retransmission Request, OFDM
Sub-channel Mapping, Hand-off and Frame Structure, and MIMO
Transmitter/Receive Architecture - the radio access technologies at the
heart of 4G LTE and that provide significant spectral efficiency,
performance and capacity. Nortel has developed fundamental and valuable
patented and patent pending technologies in these fields, and its R&D
efforts have allowed it to be an early, key contributor to LTE standard
development. Nortel's innovative advancements will enable it to be a
major provider of LTE solutions in the market.

    "Nortel is focused on helping our customers put the power of 4G LTE
wireless broadband into the hands of consumers as quickly and as
cost-effectively as possible," said Scott Wickware, vice president of
marketing and strategy for carrier networks, Nortel. "This is why we have
published competitive handset royalty rates for our LTE
standards-essential patent claims. Coupled with the cost benefits of
next-generation LTE technologies, we think moves like this by patent
holders could help provide handset suppliers with IPR cost
predictability. That in turn will hopefully encourage early adoption of
LTE and a healthy ecosystem from which service providers can build a
strong business case for LTE deployment."

    About Nortel

    Nortel is a recognized leader in delivering 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. Nortel does business in more than 150 countries around the
world. 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.

    (1) Nortel, the Nortel logo and the Globemark are trademarks of Nortel
Networks.

    (2) This is a 3rd party link as described in our Web linking practices.

    Use of the terms "partner" and "partnership" does not imply a legal
partnership between Nortel and any other party.

    (i) Nortel will license its LTE standards essential patent claims for LTE
handsets at a royalty rate of about 1 percent on the sale price, subject
specific terms to reciprocity, defensive suspension, and grantback to
Nortel products, services, and solutions, as well as other customary
license terms and conditions. Click here for more details.

Contacts:
Nortel
Karen Monaghan
(613) 763-1133
Email: kmonagha@nortel.com

Nortel
Karen Gumbs
(905) 863-7095
Email: karengu@nortel.com
Website: www.nortel.com

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