Nortel Commits to Bridging Communications Divide in Developing Markets; Aims to Identify Community to Demonstrate Impact of Communications

At a press conference in London, Nortel outlined its plan toidentify a potential site where it can work to highlight the positiveimpact of communications networks on healthcare, education andeconomic development. The Connecting Communities initiative waslaunched by Bill Owens, vice chairman and chief executive officer,Nortel and Steve Pusey, president, EMEA (Europe, Middle East, Africa)and Asia Pacific, Nortel.

"The developing world can benefit enormously from newcommunications technology," Owens said. "It has the potential toenhance lives and change the socio-economic profile of a region."

Nortel will be searching across the developing markets in itsAfrica region for a suitable community with minimal fixed or wirelesscommunications services and with a collective desire to exploit itsbenefits. In partnership with its wide base of service providercustomers, Nortel will gather information on where its technology canbe put to best use.

"Leading the development of advanced, broadband wirelesscommunications reduces the cost involved in providing wireless networkaccess in developing markets," Pusey said. "Wireless penetration inAfrica is already more than double that of fixed networks, and we feelthat there is an opportunity for communications access to be madeavailable to more remote and dispersed areas to stimulate economic,healthcare and educational development."

Nortel aims to demonstrate the applicability of information andcommunication technologies to improve or solve issues in developingmarkets. The potential benefits of the Connecting Communities projectinclude giving local trades people and businesses access to newmarkets and services, enabling better educational opportunities, andproviding improved healthcare.

Nortel believes that its CDMA wireless solutions based on the450MHz band are particularly well suited to providing some broadbandconnectivity in remote and dispersed regions of Africa. As announcedon August 11, 2005, Nortel is working with Movicel in Angola to rollout CDMA2000 1xEV-DO technology to boost capacity of its MoviNetService and to help address growing nationwide demand for advancedwireless data services like telemedicine and Internet access.

About Nortel

Nortel is a recognized leader in delivering communicationscapabilities that enhance the human experience, ignite and powerglobal commerce, and secure and protect the world's most criticalinformation. Serving both service provider and enterprise customers,Nortel delivers innovative technology solutions encompassingend-to-end broadband, Voice over IP, multimedia services andapplications, and wireless broadband designed to help people solve theworld's greatest challenges. Nortel does business in more than 150countries. For more information, visit Nortel on the Web atwww.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain information included in this press release isforward-looking and is subject to important risks and uncertainties.The results or events predicted in these statements may differmaterially from actual results or events.

Factors which could cause results or events to differ from currentexpectations include, among other things: the outcome of regulatoryand criminal investigations and civil litigation actions related toNortel's restatements and the impact any resulting legal judgments,settlements, penalties and expenses could have on Nortel's results ofoperations, financial condition and liquidity, and any relatedpotential dilution of Nortel's common shares; the findings of Nortel'sindependent review and implementation of recommended remedialmeasures; the outcome of the independent review with respect torevenues for specific identified transactions, which review will havea particular emphasis on the underlying conduct that led to theinitial recognition of these revenues; the restatement or revisions ofNortel's previously announced or filed financial results and resultingnegative publicity; the existence of material weaknesses in Nortel'sinternal control over financial reporting and the conclusion ofNortel's management and independent auditor that Nortel's internalcontrol over financial reporting is ineffective, which could continueto impact Nortel's ability to report its results of operations andfinancial condition accurately and in a timely manner; the impact ofNortel's and NNL's failure to timely file their financial statementsand related periodic reports, including Nortel's inability to accessits shelf registration statement filed with the United StatesSecurities and Exchange Commission (SEC); ongoing SEC reviews, whichmay result in changes to Nortel's and NNL's public filings; the impactof management changes, including the termination for cause of Nortel'sformer CEO, CFO and Controller in April 2004; the sufficiency ofNortel's restructuring activities, including the work plan announcedon August 19, 2004 as updated on September 30, 2004 and December 14,2004, including the potential for higher actual costs to be incurredin connection with restructuring actions compared to the estimatedcosts of such actions;

cautious or reduced spending by Nortel's customers; increasedconsolidation among Nortel's customers and the loss of customers incertain markets; fluctuations in Nortel's operating results andgeneral industry, economic and market conditions and growth rates;fluctuations in Nortel's cash flow, level of outstanding debt andcurrent debt ratings; Nortel's monitoring of the capital markets foropportunities to improve its capital structure and financialflexibility; Nortel's ability to recruit and retain qualifiedemployees; the use of cash collateral to support Nortel's normalcourse business activities; the dependence on Nortel's subsidiariesfor funding; the impact of Nortel's defined benefit plans and deferredtax assets on results of operations and Nortel's cash flow; theadverse resolution of class actions, litigation in the ordinary courseof business, intellectual property disputes and similar matters;Nortel's dependence on new product development and its ability topredict market demand for particular products; Nortel's ability tointegrate the operations and technologies of acquired businesses in aneffective manner; the impact of rapid technological and market change;the impact of price and product competition; barriers to internationalgrowth and global economic conditions, particularly in emergingmarkets and including interest rate and currency exchange ratefluctuations; the impact of rationalization and consolidation in thetelecommunications industry; changes in regulation of the Internet;the impact of the credit risks of Nortel's customers and the impact ofcustomer financing and commitments; stock market volatility generallyand as a result of acceleration of the settlement date of Nortel'sforward purchase contracts; negative developments associated withNortel's supply contracts and contract manufacturing agreements,including as a result of using a sole supplier for a key component ofcertain optical networks solutions; the impact of Nortel's supply andoutsourcing contracts that contain delivery and installationprovisions, which, if not met, could result in the payment ofsubstantial penalties or liquidated damages; any undetected productdefects, errors or failures; and the future success of Nortel'sstrategic alliances.

For additional information with respect to certain of these andother factors, see the most recent Annual Report on Form 10-K andQuarterly Report on Form 10-Q filed by Nortel with the SEC. Unlessotherwise required by applicable securities laws, Nortel disclaims anyintention or obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events orotherwise.

Nortel, the Nortel logo and the Globemark are trademarks ofNortel Networks. CDMA2000 is a trademark of the TelecommunicationsIndustry Association (TIA).