Nortel Networks Delivers Largest Programmable Switching System to Network Enhanced Telecom (NET) Nov 2, 1998 Nortel Networks* [NYSE: NT/TSE: NTL] announced today that Network Enhanced Telecom (NET), LLP, a growing provider of commercial and residential prepaid services, has selected Nortel Networks' DMS-Programmable Services Node* (DMS-PSN) to expand the company's prepaid services platform. Representing Nortel Networks' largest capacity DMS-PSN agreement to date, NET's new installation will significantly enhance the company's network capacity and service portfolio, providing over 20,000 ports. Nortel Networks' DMS-PSN system is scheduled for installation in Los Angeles, California in January 1999 and will augment NET's existing DMS-250* PSN located in Longview, Texas. Leveraging their Los Angeles network site, NET plans accelerated deployment of prepaid services throughout California, as well as developing Pacific Rim markets. Future potential markets also include Mexico, Central, and South America. "Nortel Networks' DMS-250 PSN is designed to incorporate the programmable switching functionality, capacity, and reliability required by service providers to deliver mass market international and domestic prepaid services efficiently," said Vickie Yohe, president, Carrier Networks, Nortel Networks. "With this significant deployment, NET has secured the service foundation that can help them seize market share in the burgeoning global prepaid services market and establish a long-term competitive advantage." "The economies of scale provided by Nortel Networks' DMS-250 with DMS-PSN, combined with SS7 connectivity, and Simplified Telesys' Web-based platform for administrative functions, sharply differentiate NET's service offerings in the marketplace," said Pete Pattullo, president and CEO of NET. "The capacity for future growth, the reduction in post-dial delays, and a proven reliability track record make the DMS-PSN-based network unmatched in the prepaid services industry today." As a service bureau, NET provides advanced network services to customers whose expertise is distribution of various prepaid services and plans. Within these growing domestic and international markets, NET's primary service offering via the DMS-PSN is the prepaid calling card application. Network Enhanced Telecom utilizes Simplified Telesys' card services platform to drive the DMS-PSN, providing the only fourth generation (i.e. client/server in a network topology), off-board telephony platform with extensive capacity for prepaid services. Simplified Telesys' platform was designed to handle the largest growth capacity in the market, including base system configurations that manage traffic at over 200 million minutes per month and meet the challenges of platform stability and real-time data transfers. The Simplified platform also provides the Web-based, Java-driven interface that allows NET real-time access to customer service, billing, and administrative functions. Residing on the DMS-250 SuperNode* Long Distance switch, DMS-PSN software provides a comprehensive array of features that enable carriers to shift control of call processing to an external service control platform. The stand-alone DMS-PSN is available for carriers offering both enhanced and basic services who also desire the upside growth potential of a large-scale programmable switch. The DMS-PSN is Year 2000 Ready and supports connectivity up to 100,000 ports. The functionality provided by the DMS-PSN adds value to carrier operations by facilitating service differentiation, trialability, and speed-to-market. Network Enhanced Telecom (NET), LLP is a private, Texas-based telecommunications company focused on providing prepaid services as a service bureau. NET commercially launched its prepaid product with Simplified Telesys' Web-based services solutions in December 1997 and is currently operating at a US$45+ million annual revenue run rate. Simplified Telesys, based in Austin, Texas, develops advanced telephony solutions for enhanced service providers. Organized in 1996, the company's customer based included 16 installed systems in the United States and Mexico. Nortel Networks works with customers worldwide to design, build, and deliver telephony and IP-optimized networks. Customers include public and private enterprises and institutions; Internet service providers; local, long-distance, cellular and PCS communications companies, cable television carriers, and utilities. Nortel Networks' common shares are listed on the New York, Toronto, Montreal, Vancouver, and London stock exchanges. Nortel Networks had 1997 revenues of US$15.5 billion and Bay Networks, a wholly owned subsidiary of Nortel Networks, had revenues of US$2.4 billion during its most recent fiscal year. The combined company's workforce totals approximately 80,000 employees worldwide. *Nortel Networks, the Nortel Globemark, How the world shares ideas, DMS-Programmable Services Node, SuperNode and DMS-250 are trademarks of Northern Telecom. More information about Nortel can be found on the Internet at www.nortel.com. About NetworkIP Founded in 1997, NetworkIP is an industry leading e.Communications application service provider of enhanced services. The company provides value-added, business-to-business communication services via the Internet to service providers. The company has created the first future-proof, large scale e.Communications network, bringing together the best in class switching, computing hardware, data storage, IP networking, and software development methodology. NetworkIP's platform enables CLECs, ILECs, ISPs, cable companies, municipalities and public utilities, and other businesses to offer broadband voice, data and video services. Current e.Communication products and services offered by NetworkIP include e.Prepaid Calling Cards, e.Prepaid Long Distance, e.Prepaid 1+ Long Distance, e.Prepaid Internet, e.Conferencing and e.Cable.