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U.S. Cellular Selects Nortel Networks for CDMA2000 1X Network Upgrade; Next Generation Infrastructure to Create Networking Efficiencies, Reduce Costs

U.S. Cellular Selects Nortel Networks for CDMA2000 1X Network Upgrade; Next Generation Infrastructure to Create Networking Efficiencies, Reduce Costs

Business Editors & High Tech Writers

DALLAS–(BUSINESS WIRE)–May 16, 2002

U.S. Cellular (AMEX:USM) has selected Nortel Networks (NYSE:NT) (TSX:NT.) as the primary supplier for its third generation (3G) network upgrade under a multi-year agreement.

The agreement calls for Nortel Networks to deploy CDMA2000 1X radio and packet core switching equipment to 3,500 base stations and related switching infrastructure over a five year period to expand subscriber capacity, increase efficiency and drive lower operating costs across U.S. Cellular’s nationwide wireless network. This deployment will also enable U.S. Cellular’s network to provide next generation data services.

“Nortel Networks CDMA2000 1X solution will deliver top quality, ubiquitous wireless services to our customers and roaming partners, while helping us reduce operating costs and increase profitability,” said Mike Irizarry, executive vice president, engineering and chief technology officer, U.S. Cellular.

“U.S. Cellular is a long standing customer, and we are committed to helping them drive down costs through networking efficiencies based on our CDMA solutions,” said Pascal Debon, president, Wireless Networks, Nortel Networks. “Our CDMA2000 1X portfolio combines Nortel Networks expertise in packet networking with proven radio access solutions that can enable our customers to nearly double voice capacity, and deploy new personalized data services that can generate new revenues.”

“We have shown tremendous momentum in recent months with contract wins across the globe that are extending our next-generation wireless footprints,” Debon said. “We have now announced more than 25 major 3G contracts globally, and are proud to see the world’s leading operators turn to Nortel Networks as a primary infrastructure provider.”

Nortel Networks has been deploying wireless networking equipment with U.S. Cellular since the mid 1980s. Upgrades announced today include deployment of Nortel Networks Metro Cell CDMA base station and radio switching equipment. Nortel Networks is also implementing CDMA2000 1X for leading service providers around the world, and has deployed more than 30,000 CDMA base stations for more than 64 customers in 14 countries.

U.S. Cellular Corporation, the nation’s eighth largest wireless service carrier, provides wireless service to more than 3.5 million customers in 148 markets throughout 25 states. The Chicago-based company operates on a customer satisfaction strategy, meeting customers’ needs by providing a comprehensive range of wireless products and services, superior customer support and a high quality network. U.S. Cellular is listed and traded as USM on the American Stock Exchange. For more information about U.S. Cellular, visit the company’s Web site at www.uscellular.com.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro and Enterprise Networks, Wireless Networks and Optical Long Haul Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks 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; 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 with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims 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 and the Globemark are trademarks of Nortel Networks.

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