- Cooperative Efforts Support Strategy to Simplify Business Communications

SEOUL, Korea – LG-Nortel, a joint venture of LG Electronics and Nortel* [NYSE/TSX: NT], will develop and market with Microsoft Corp., a business enabled IP desktop phone built on Microsoft’s unified communications platform to provide powerful communications for medium-to-large enterprises and government departments.

Based on Microsoft Office Communicator phone experience and designed for intelligent communication across business applications, networks and devices, the new IP desktop phones will work with Microsoft Office Communications Server 2007 presence-awareness, powerful IP call management features and enhanced instant messaging capabilities. Users will be able to locate and communicate with customers, colleagues and business partners within a more highly integrated and secure environment that works seamlessly with Microsoft Office Communicator 2007 and a range of other communications options that support more flexible and effective communications.

“Microsoft’s strategy for unified communications supports the development of innovative devices that enable a more intuitive and effective unified communications voice experience,” said Zig Serafin, general manager of the Unified Communications Group at Microsoft. “We look forward to continuing to work with LG-Nortel on IP desktop phone innovations to create new levels of business value for our enterprise customers.”

“We envision this winning combination of the LG-Nortel IP business desktop phone with Microsoft’s unified communications platform to have a strong impact on the market as it helps end-users communicate, collaborate and make informed decisions more quickly and efficiently,” said Jong Dae An, head of LG-Nortel’s international enterprise sales division. “Working together, we are committed to developing advanced devices and solutions that simplify business by facilitating more effective communication.”

The initial target market for the LG-Nortel business enabled IP desktop phone is small to medium sized companies and government departments in selective markets across North America, Europe and Asia, including Korea, from 2007. Both Microsoft and LG-Nortel will market the new IP desktop phone to Microsoft customers worldwide as well as through LG-Nortel’s global distribution network of operators and channel partners.

LG-Nortel previously announced a strategic relationship with Microsoft in May 2006 when the two companies signed a Memorandum of Understanding (MoU) for broad range collaboration in VoIP, including the joint development and marketing of Windows CE-based IP terminals and the new Windows CE 6 videophone.