Bell Canada and Nortel Deliver Advanced Broadband Services and Applications to Northern Ontario Community; Next-Generation Wireless Solutions to Enhance Socio-Economic Growth in Chapleau.

CHAPLEAU, Ontario -- Project Chapleau, a technology showcase developed by Bell Canada, Nortel (NYSE:NT)(TSX:NT), and the Township of Chapleau, today turned on high-speed networking and applications in this Northern Ontario community. Project Chapleau is designed to evaluate the economic and social benefits of communications technologies on rural communities.

"What began as a vision -- a critical need to create an economic recovery plan for our community -- is now a reality," said Chapleau Mayor Earle Freeborn. "Broadband access, including one of the first rural wireless mesh networks in Canada, will enable Chapleau to connect, and compete, with other communities throughout the world, positioning us as a centre for innovation and change."

As part of this technology showcase, Chapleau will benefit from next generation wireless mesh, optical, multimedia communications and enterprise solutions using an upgraded optical network. Bell Canada and Nortel have also opened the Chapleau Innovation Centre, where residents can access and learn about new technologies. Through the Centre they can also connect virtually with the Bell-Nortel Innovation Centre in Ottawa and the leading-edge technologies and expertise being developed there. The Chapleau Community Portal -- www.chapleau.ca -- now provides a virtual meeting place for the community and access to the global marketplace.

"Project Chapleau is not just about deploying technology, it is about learning from this community and about looking at new models for the provision of healthcare, education and commerce," said Michael Sabia, President and CEO of BCE and CEO of Bell Canada. "Access to new resources and services enables Chapleau's residents and businesses to participate in and build a broader concept of community."

Over the next 14 months, Bell Canada and Nortel will work with leading researchers from Laurentian University, the University of Toronto and others to study the impact of broadband technologies and applications on the community. Project Chapleau is working with school boards and teachers in the town to broaden their curriculum through leading edge applications and online educational initiatives.

"By working with the schools, we hope to bring the world to Chapleau so that students and teachers can pull educational resources from the Internet and collaborate with their peers and colleagues in other remote communities, cities and even other countries," said Bill Owens, vice chairman and chief executive officer, Nortel. "We will work with researchers to better understand how technology can change the way children learn and to study the impact on province-wide programs such as math and literacy."

The delivery of health services to the area is expected to be enhanced with better collaborative tools for health practitioners and applications in disease management, with a particular focus in the area of diabetes monitoring.

Chapleau is a Northern Ontario community of approximately 3,000 people and lies about 320 kilometers northeast of Sault Ste. Marie. The community is the gateway to the world's largest nature preserve -- the 700,000-hectare Chapleau Crown Game Preserve.

For more information please visit www.chapleau.ca.

About Bell Canada

Bell Canada, Canada's national leader in communications, provides connectivity to residential and business customers through wired and wireless voice and data communications, local and long distance phone services, high speed and wireless Internet access, IP-broadband services, e-business solutions and satellite television services. Bell Canada is wholly owned by BCE Inc. For more information please visit www.bell.ca.

About Nortel

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

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the outcome of regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity, and any related potential dilution of Nortel's common shares; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the ongoing independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal control over financial reporting and the conclusion of Nortel's management and independent auditor that Nortel's internal control over financial reporting is ineffective, which could continue to impact Nortel's ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (SEC); the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004 and December 14, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; cautious or reduced spending by Nortel's customers; increased consolidation among Nortel's customers and the loss of customers in certain markets; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's ability to integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization and consolidation in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel's customers and the impact of customer financing and commitments; general stock market volatility; negative developments associated with Nortel's supply contracts and contract manufacturing agreements, including as a result of using a sole supplier for a key component of certain optical networks solutions; the impact of Nortel's supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; any undetected product defects, errors or failures; the future success of Nortel's strategic alliances; and certain restrictions on how Nortel and its president and chief executive officer conduct business. For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.