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InvestorsMay 4, 2004

Charter Communications Selects Nortel Networks Cable VoIP, Multimedia Communications Solutions

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NEW ORLEANS, May 4, 2004 (BUSINESS WIRE) -- Nortel Networks (NT) (CA:NT) today announced that it has been selected by Charter Communications, Inc. (CHTR) to expand voice over Internet Protocol (VoIP) service offerings in Charter's Midwest and Great Lakes operating divisions using Nortel Networks cable VoIP solution featuring Succession Communication Server (CS) 2000-Compact softswitches. This selection, which extends a relationship announced in December 2002, is subject to execution of a definitive agreement.

"We've rebuilt and upgraded our infrastructure to deliver advanced products and services including voice over IP," said Wayne Davis, senior vice president, Engineering and Technical Operations, Charter. "As such, Nortel Networks has played a strategic role in our packet network transformation, delivering a cable voice over IP solution that is very robust and mature. Their extensive knowledge of cable telephony, together with a strong background in services and professional support, has enabled us to aggressively enter and compete in the telephony market."

As part of its overall expansion, Davis also said Charter intends to deploy Nortel Networks Multimedia Communication Server (MCS) 5200 in a 2004 market trial, giving both residential and business customers access to multimedia services independent of location. The new Charter VoIP architecture will include the capability to communicate between a Session Initiation Protocol (SIP) server and a PacketCable(TM) qualified Call Management Server (CMS), effectively bringing the rich world of SIP-based features to a PacketCable environment.

"Nortel Networks is fundamentally changing interpersonal communications across all markets," said Dan Mondor, general manager, Global Cable Solutions, Nortel Networks. "We have generated critical momentum in the cable market and continue to focus efforts on delivering carrier-grade cable solutions that enable providers like Charter to pave the way for new integrated video, voice, and data services. Charter continues to be a leader in cable IP telephony and this addition to their services portfolio will help them to drive increased revenue opportunities."

To speed time to market and ensure carrier grade service for its customers, Charter will use Nortel Networks professional services to support the planning and deployment of the VoIP solution.

In September 2002, Charter deployed the first commercially available cable VoIP service in North America using Nortel Networks equipment, and has experienced virtually no downtime on the softswitch since launch.

For the entire year and fourth quarter of 2003, Nortel Networks ranked #1 in the global markets for voice over IP ports shipped and in global softswitch revenue, according to Synergy Research Group and In-Stat/MDR. Nortel Networks has a proven portfolio of products and services for packet voice and multimedia services. Nortel Networks is providing Succession VoIP solutions to leading operators, including Cox Communications, Sprint, MCI, TeleCable, Hong Kong Broadband Network, Verizon Communications, Bell Canada, Cable & Wireless Cayman Islands, China Netcom and China Railcom.

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 Wireless Networks, Wireline Networks, Enterprise Networks, and Optical 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 or

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 of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on credit and 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 control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; Nortel Networks ability to meet the financial covenants in its credit facilities; 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, Nortel Networks cash flows and compliance with financial covenants; 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; risks associated with a consolidation of Nortel Networks common shares; 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.

Nortel Networks, the Nortel Networks logo, the Globemark, Business Without Boundaries and Succession are trademarks of Nortel Networks. PacketCable is a trademark of Cable Television Laboratories, Inc.

SOURCE: Nortel Networks

Nortel Networks
Christie Blake, 978-288-8439