Boston, MA – October 23, 2006 – Axerra Networks, “The Pseudo-Wire Company®,” today announced a “Master Purchase and Sale Agreement” with Nortel [NYSE/TSX:NT]. This agreement adds Axerra’s Pseudo-Wire solutions to Nortel’s portfolio of wireless backhaul solutions, enabling Nortel to offer a new backhaul option to CDMA wireless operators for improved efficiency in the backhaul of CDMA voice and data traffic.

Nortel is a recognized leader in delivering communications capabilities to service provider and enterprise customers. Nortel’s innovative technology solutions encompass wireline and wireless networks, with its wireless solutions providing operators seamless evolution to next-generation wireless networks and enabling the cost-effective network growth required to support significant capacity increases in both voice and data.

“Providers are rolling out 3G services that require more and more bandwidth, underscoring the need for a more effective way to backhaul voice and data traffic,” said Doug Wolff, vice president and general manager, CDMA, Nortel. "This agreement with Axerra will enable us to expand our backhaul options and meet the backhaul needs of our CDMA customers efficiently and cost-effectively.”

“Our Pseudo-Wire backhaul solution in combination with Nortel’s CDMA offerings are essential components of a new ecosystem," said Gadi Tamari, CEO of Axerra Networks. “We’re extremely pleased that Nortel chose Axerra’s Pseudo-Wire solutions to augment their CDMA portfolio which targets all participants in this ecosystem.”

Axerra Networks leads the industry in live deployments of Pseudo-Wires in mobile backhaul applications. Axerra’s Pseudo-Wire solution supports all generations of mobile wireless networks, including CDMA2000, 1xRTT, GSM, GPRS, UMTS (including comprehensive support for HSDPA) – as well as any combination of mobile wireless services -- all over a single packet RAN. Axerra’s solution preserves native signaling and features across packet networks, enables bandwidth sharing, and provides the clock recovery capabilities that are required for reliable mobile services. AXN Pseudo-Wire Gateways and Access Devices™ support circuit emulation and service emulation, including Frame Relay/HDLC, Ethernet, and even IMA-ATM services, enabling 2G, 2.5G, and 3G voice and data aggregation from a single box. AXN Pseudo-Wire platforms control latency, jitter, and packet loss – critical capabilities for reliable mobile applications.

Axerra Networks and its Pseudo-Wire technology have garnered a number of prestigious industry awards this year. At the 3GSM World Congress in February, Axerra's solutions were named as "commended" finalists in the GSM Association 2006 Awards for "best radio access product or service." In May, Axerra was named a recipient of the 2006 Red Herring 100 Europe award, which recognizes the 100 top private companies playing a leading role in innovation and technology. In June, Red Herring magazine, in conjunction with Israel Venture Association, identified Axerra as one of the top three Israeli startups in telecommunications and a finalist in the Israeli Startup Contest 2006. Also in June, Axerra was named to FierceMarket's Fierce 15 list, honoring the company's innovations that benefit the wireless market.

About Axerra Networks, Inc.
Axerra Networks is the leading provider of circuit emulation and service emulation solutions over packet access networks. Axerra’s Pseudo-Wire solutions enable mobile wireless operators, cable MSOs, competitive service providers, and incumbent carriers to extend IP + legacy voice and data services in native format over Ethernet, IP, and MPLS networks. The result is greater operational efficiency, new revenue opportunities, and a smooth migration strategy to a single converged network, without stranding any revenue streams from profitable legacy services. With Axerra’s Pseudo-Wire solutions, service providers can convert any packet access network (Carrier Ethernet, broadband wireless including WiMAX, cable HFC, xDSL, PON, etc.) into a full-service alternative to TDM access. For more information, please visit: www.axerra.com.

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