Nortel Networks unveils vision, strategy for high-performance Internet in Israel

Nortel Networks has launched Nortel Networks Israel (Sales and Marketing) Ltd., a new joint venture intended to build on a successful 20-year relationship with Koor Industries subsidiary Telrad to deliver high-performance Internet solutions to carrier and enterprise customers in Israel.

"We`re investing heavily and leveraging the global resources of Nortel Networks to bring a new, high-performance Internet to Israel," said Darryl Edwards, chief executive officer, Nortel Networks Israel. "Establishing a fully operational headquarters in Israel enables us to invest more in our existing customers, and to develop relationships with new players in this dynamic market."

"This is an exciting investment for us," said Amiram Fleisher, spokesperson, Koor Industries Ltd. "It further strengthens our position as a telecommunications holding company, but more importantly allows the new company to deliver state-of-the-art solutions to the deregulated market at a time when both businesses and consumers are investing to realize the Internet`s huge potential benefits."

High levels of Internet and cellular use, combined with an abundance of high quality human resources, make Israel a significant market opportunity. The Meimad Institute estimates that 29 percent of Israel`s households are already connected to the Internet, and the Israeli Ministry of Communication predicts a continued increase in demand for Internet access. Salomon Smith Barney expects Israel`s cellular market - already with a higher penetration rate than Europe - to grow at 15 percent annually through 2005.

"With the Israeli telecommunications sector on the threshold of a major restructuring in which licenses will be granted to a number of domestic operators, Nortel Networks Israel is able to help both incumbent and new operators bring the power of the high-performance Internet to their customers," Edwards said.

Nortel Networks Israel, 72 percent owned by Nortel Networks, includes the former sales, marketing and support businesses of Telrad. It also encompasses Telrad`s business in additional markets outside of Israel, including South America and Africa. Nortel Networks Israel expects to employ up to 400 sales, marketing, service and technical people in its first quarter of operation.

Israel ranks third - behind only the United States and Canada - with approximately 100 companies listed on the NASDAQ. Venture capital investment in Israel surpassed US$1 billion for 1999 and rose 79 percent in the first quarter of this year compared to first quarter 1999, according to Ernst and Young Israel and Venture One.