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Nortel, SECI to Establish Southeast Europe Joint Venture

JV Nortel SE Will Address Regional Carrier Growth

Nortel and Southeast European Communications and Investments Inc. (SECI) today announced their intent to establish a joint venture in southeast Europe. The creation of the joint venture with SECI - a company that is actively involved with providing advisory services in telecommunications, energy and various infrastructure projects in southeast Europe - will allow Nortel to reach this rapidly growing regional market.

The proposed joint venture will bring the expertise of SECI's existing broad network of representatives and contacts in southeastern Europe to drive sales of Nortel's next-generation Carrier Ethernet, optical, converged multimedia and mobility solutions to carriers in the region. The parties have been in discussion for some time and have now summarized their intentions in a Memorandum of Understanding (MOU). The non-binding MOU is expected to result in a definitive agreement in early 2007.

The new company formed through the joint venture will operate under the name Nortel SE and will initially have offices in Bulgaria, Macedonia and Serbia. Nortel SE will be responsible for driving Nortel sales in Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, Serbia and Slovenia. Initial plans are for Nortel SE to have a sales and marketing staff of approximately 30 people.

"Southeastern Europe is a rapidly growing region of opportunity for Nortel which is why we are increasing our presence here," said Sorin Lupu, leader Eastern European Markets, Nortel. "Carriers and enterprises in southeast Europe are transforming themselves in order to meet the growing need for anywhere, anytime communications. With a move towards 4G happening, and with WiMAX licenses to be granted or implemented in almost all countries in southeast Europe, this new JV will help Nortel address new market opportunities and deliver improved support for existing customers."

"SECI management has been focusing exclusively on the southeast Europe region for many years. We have established relationships throughout the region and have worked in an advisory capacity on several privatizations and telecommunications restructuring projects," said Constantine Aloupis, CEO, SECI. "The opportunity for us to combine local knowledge and industry expertise with Nortel's technical innovation and global understanding of carrier needs will be a catalyst for advancing telecommunications in southeast Europe."

The proposed joint venture is subject to execution of definitive agreements and required regulatory approvals.

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