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Nortel Networks

China's Ministry of Railways Signs GSM-R Framework Agreement With Nortel

Beijing, China (ots/PRNewswire)

- Powering Digital Mobile Signaling and Communications Spanning 20
Provinces
China's Ministry of Railways (MOR) and Nortel(x) (NYSE/TSX: NT)
have signed a framework agreement for Nortel to provide GSM Railway
(GSM-R) switching centers to enable digital mobile signaling and
operational communications along passenger lines spanning 20 of
China's 31 provinces.
The Nortel GSM-R switching centers will cover nearly half of MOR's
national railway footprint, serving both conventional railway lines
as well as planned high-speed lines. Seven switching centers will be
deployed at key locations nationwide, supplementing two switching
centers previously deployed in 2005.
Secure and reliable digital mobile voice and data communications
for train drivers, signaling personnel and other operational staff
rank high on MOR's agenda for the evolution and modernization of
China's railway network. Nortel's global leadership in GSM-R and vast
experience deploying GSM-R networks worldwide influenced MOR's
decision to sign this agreement with Nortel.
"MOR's selection of Nortel switching centers puts us in a
favorable position for future business as China furthers its
commitment to GSM-R for railway communications," said Robert Mao,
president and chief executive officer, Greater China, Nortel. "To
further enhance the experience of millions of passengers traveling
China's railways each day, a comprehensive and advanced
communications network will help China power the rapid growth of its
railway network and, in particular, its migration to 200-300km per
hour  fast trains."
Nortel will be providing MOR with its mobile switching center
solution - a flexible circuit and packet switching platform that
delivers leading reliability complemented by the features and
services required to manage and grow a core network. Nortel's full,
end-to-end GSM-R solution also includes a railway-customized GSM-R
base transceiver station for better trackside coverage under severe
environmental conditions, and is scalable to support GPRS and
high-speed data and voice communications.
Nortel is a world leader in GSM-R technology and has been selected
to deploy GSM-R networks in nine countries, including national
deployments for the three largest railway operations in Europe - RFF
in France, Network Rail in Great Britain and Deutsche Bahn in
Germany. Nortel has also deployed GSM-R networks for railway lines
between Bilbao and Santander for Spain's Adif, for Eastern Railways
in India, for Cesky drahy (CD) in the Czech Republic, and for Slovak
Railways in Slovakia. In addition, Nortel has built dedicated,
end-to- end high-speed line system for Deutsche Bahn's ICE between
Frankfurt and Cologne, and for SIRTI in Italy between Rome and
Naples.
Nortel has been a pioneer in the GSM-R standards process since
1992, and works with Union Internationale des Chemins de Fer (UIC)
and the Europe Telecommunications Standards Institute (ETSI) on
standards improvements. Nortel supplied equipment for the initial
Mobile Radio for Railways Networks in Europe (MORANE) trial and was a
major contributor to the European Integrated Railway Radio Enhanced
Network (EIRENE) GSM-R standard.
About Nortel
Nortel is a recognized leader in delivering communications
capabilities that enhance the human experience, ignite and power
global commerce, and secure and protect the world's most critical
information. Our next-generation technologies, for both service
providers and enterprises, span access and core networks, support
multimedia and business-critical applications, and help eliminate
today's barriers to efficiency, speed and performance by simplifying
networks and connecting people with information. Nortel does business
in more than 150 countries. 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", "plans", "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. Although Nortel
believes expectations reflected in such forward-looking statements
are reasonable based upon certain assumptions, they may prove to be
inaccurate and consequently Nortel's actual results or events could
differ materially from its expectations set out in this press
release. Further, actual results or events could differ materially
from those contemplated in forward-looking statements as a result of
the following (i) risks and uncertainties relating to Nortel's
restatements and related matters including: Nortel's most recent
restatement and two previous restatements of its financial statements
and related events; the negative impact on Nortel and NNL of their
most recent restatement and delay in filing their financial
statements and related periodic reports (including the anticipated
delay in filing the Quarterly Reports on Form 10-Q for the first
quarter of 2006) causing them to breach their public debt indentures
and, if the delay extends beyond June 15, 2006, their obligations
under their credit facilities, with the possibility that the holders
of their public debt or NNL's lenders would seek to accelerate the
maturity of that debt, and causing, if the delay extends beyond June
15, 2006, a breach of NNL's support facility with EDC with the
possibility that EDC would refuse to issue additional support under
the facility, terminate its commitments under the facility or require
NNL to cash collateralize all existing support; legal judgments,
fines, penalties or settlements, or any substantial regulatory fines
or other penalties or sanctions, related to the ongoing regulatory
and criminal investigations of Nortel in the U.S. and Canada; any
significant pending civil litigation actions not encompassed by
Nortel's proposed class action settlement; any substantial cash
payment and/or significant dilution of Nortel's existing equity
positions resulting from the finalization and approval of its
proposed class action settlement, or if such proposed class action
settlement is not finalized, any larger settlements or awards of
damages in respect of such class actions; any unsuccessful
remediation of Nortel's material weaknesses in internal control over
financial reporting resulting in an inability to report Nortel's
results of operations and financial condition accurately and in a
timely manner; the time required to implement Nortel's remedial
measures; Nortel's inability to access, in its current form, its
shelf registration filed with the United States Securities and
Exchange Commission (SEC), and Nortel's below investment grade credit
rating and any further adverse effect on its credit rating due to
Nortel's restatement of its financial statements; any adverse affect
on Nortel's business and market price of its publicly traded
securities arising from continuing negative publicity related to
Nortel's restatements; Nortel's potential inability to attract or
retain the personnel necessary to achieve its business objectives;
any breach by Nortel of the continued listing requirements of the
NYSE or TSX causing the NYSE and/or the TSX to commence suspension or
delisting procedures; any default in Nortel's filing obligations
extending beyond July 15, 2006 for the 2006 First Quarter Form 10-Qs,
causing any Canadian securities regulatory authority to impose an
order to cease all trading in Nortel's securities within the
applicable jurisdiction or to impose such an order sooner if Nortel
fails to comply with the alternate information guidelines of such
regulatory authorities; (ii) risks and uncertainties relating to
Nortel's business including: yearly and quarterly fluctuations of
Nortel's operating results; reduced demand and pricing pressures for
its products due to global economic conditions, significant
competition, competitive pricing practice, cautious capital spending
by customers, increased industry consolidation, rapidly changing
technologies, evolving industry standards, frequent new product
introductions and short product life cycles, and other trends and
industry characteristics affecting the telecommunications industry;
any material and adverse affects on Nortel's performance if its
expectations regarding market demand for particular products prove to
be wrong or because of certain barriers in its efforts to expand
internationally; any reduction in Nortel's operating results and any
related volatility in the market price of its publicly traded
securities arising from any decline in its gross margin, or
fluctuations in foreign currency exchange rates; any negative
developments associated with Nortel's supply contract and contract
manufacturing agreements including as a result of using a sole
supplier for key optical networking solutions components, and any
defects or errors in Nortel's current or planned products; any
negative impact to Nortel of its failure to achieve its business
transformation objectives; additional valuation allowances for all or
a portion of its deferred tax assets; Nortel's failure to protect its
intellectual property rights, or any adverse judgments or settlements
arising out of disputes regarding intellectual property; changes in
regulation of the Internet and/or other aspects of the industry;
Nortel's failure to successfully operate or integrate its strategic
acquisitions, or failure to consummate or succeed with its strategic
alliances; any negative effect of Nortel's failure to evolve
adequately its financial and managerial control and reporting systems
and processes, manage and grow its business, or create an effective
risk management strategy; and (iii) risks and uncertainties relating
to Nortel's liquidity, financing arrangements and capital including:
the impact of Nortel's most recent restatement and two previous
restatements of its financial statements; any acceleration under
their public debt indentures and credit facilities, which may result
in Nortel and NNL being unable to meet their respective payment
obligations; any inability of Nortel to manage cash flow fluctuations
to fund working capital requirements or achieve its business
objectives in a timely manner or obtain additional sources of
funding; high levels of debt, limitations on Nortel capitalizing on
business opportunities because of credit facility covenants, or on
obtaining additional secured debt pursuant to the provisions of
indentures governing certain of Nortel's public debt issues and the
provisions of its credit facilities; any increase of restricted cash
requirements for Nortel if it is unable to secure alternative support
for obligations arising from certain normal course business
activities, or any inability of Nortel's subsidiaries to provide it
with sufficient funding; any negative effect to Nortel of the need to
make larger defined benefit plans contributions in the future or
exposure to customer credit risks or inability of customers to
fulfill payment obligations under customer financing arrangements;
any negative impact on Nortel's ability to make future acquisitions,
raise capital, issue debt and retain employees arising from stock
price volatility and further declines in the market price of Nortel's
publicly traded securities, or any future share consolidation
resulting in a lower total market capitalization or adverse effect on
the liquidity of Nortel's common shares. For additional information
with respect to certain of these and other factors, see the Company's
Annual Report on Form 10-K/A and NNL's Annual Report on Form 10-K 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.
(x) Nortel, the Nortel logo and the Globemark are trademarks of
Nortel Networks.

Contact:

For further information: Sue Feng, +8610-6510-8202, shufe@nortel.com;
Ben Roome, +44-7740-670-077, benroome@nortel.com; Pat Cooper,
+1-(425)-450-7523, pat.cooper@nortel.com

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