Migration of Long-Distance Voice Traffic Enables Operator to Significantly Increase Capacity, Improve Efficiency, Reduce Costs

Grupo Iusacell S. A. de C.V. (Iusacell) (NYSE:CEL)(BMV:CEL), a leading wireless operator in Mexico, and Nortel Networks (NYSE:NT)(TSX:NT) have completed deployment of a voice over Internet Protocol (VoIP) core network to support the operator’s long-distance traffic, significantly increasing network capacity and efficiency.

Among the first next generation carrier VoIP networks in Mexico, this deployment positions Iusacell to converge voice and data traffic into packets that can be transmitted together over a single, high-speed network. This helps to drive reduced operational costs and allows Iusacell to offer advanced new wireless services to residential and enterprise customers.

«Iusacell has now moved all of its long-distance traffic to an IP network,» said Gustavo Guzman, managing director of Iusacell. «The Nortel Networks VoIP solution lets us converge voice, data and multimedia, helping us optimize network efficiency and flexibility. With this implementation we can save on cost while offering added value to our customers.»

Iusacell has migrated its circuit switches to a packet infrastructure using Nortel Networks Succession Communication Server (CS) 2000 Superclass softswitch. Iusacell has also deployed Nortel Networks Passport 15000 and Passport Packet Voice Gateways in Mexico’s main cities as the basis for its new IP-based core data infrastructure, positioning the operator to easily expand and deploy third generation (3G) wireless technologies.

«Nortel Networks has an extensive VoIP portfolio and global experience in evolving circuit-switched networks into next generation infrastructures,» said Pablo Vazquez, managing director, Mexico, Nortel Networks. «Combined with a clear understanding of its local requirements, we are uniquely positioned to help Iusacell successfully realize its circuit-to-packet evolution, and we will continue to support Iusacell in delivery of even more advanced services to its customers in Mexico.»

Nortel Networks Succession CS 2000 Superclass softswitch enables service providers to deliver the full suite of traditional voice services to business and residential customers on a packetized network, with voice and data traffic sharing the same communications lines to provide more efficient and cost-effective use of existing transmission capacity. As a trunk gateway, Passport PVG is an integral part of Nortel Networks Carrier Voice over IP solutions. It offers complete carrier-grade options for long distance, local exchange, wireless, and cable operators. Nortel Networks Passport multiservice switching portfolio is deployed with more than 20 major wireless operators around the world, delivering proven reliability for wireless packet networking solutions across GSM/GPRS/UMTS, TDMA and CDMA/CDMA2000 technologies.

Nortel Networks, which has a proven portfolio of products and services for packet voice services, is providing Succession voice over packet solutions to a number of leading operators, including Bell Canada, Cable & Wireless Cayman Islands, Charter Communications, China Netcom, China Railcom, Cox Communications, Hong Kong Broadband Network, MCI, Sprint and Verizon Communications.

Grupo Iusacell, S.A. de C.V. (Iusacell)(NYSE:CEL)(BMV:CEL) is a wireless cellular and PCS service provider in Mexico encompassing a total of approximately 92 million POPs, representing approximately 90 percent of the country’s total population. Independent of the negotiations towards the restructuring of its debt, Iusacell reinforces its commitment with customers, employees and suppliers and guarantees the highest quality standards in its daily operations offering more and better voice communication and data services through state-of-the-art technology, such as its new 3G network, throughout all of the regions in which it operate.

Grupo Iusacell, S.A. de C.V. quarterly reports and all other written materials may from time to time contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our filings with the Securities and Exchange Commission.

As a global innovation leader, Nortel Networks enriches consumer and business communications worldwide by offering converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks on the Web at www.nortelnetworks.com or www.nortelnetworks.com/media_center.

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 outcome of Nortel Networks independent review and planned restatement or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks 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; continued reductions in spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal controls; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks ability to 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; barriers to 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; changes in regulation of the Internet; the impact of the credit risks of Nortel Networks customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of Nortel Networks purchase contracts; the impact of Nortel Networks supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters.

For additional information with respect to certain of these and other factors, see the most recent Form 10 Q/A and Form 10-K/A 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.

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