Boeing Selects Nortel Networks to Build Private Nationwide Optical Network.

Business Editors & High Tech Writers

OTTAWA--(BUSINESS WIRE)--July 23, 2002

The Boeing Company has awarded an estimated US$20 million contract to Nortel Networks (NYSE:NT)(TSX:NT.) to build a private nationwide optical network based on DWDM (dense wavelength division multiplexing) and next generation SONET technology.

Boeing plans to deploy Nortel Networks OPTera Long Haul 1600 Optical Line Systems and OPTera Metro 3500 Multiservice Platform in multiple cities extending over 9,100 miles. Together, these two platforms are designed to exploit the synergies between long haul and metro networks - like a common management platform and full interworking at the optical layer - to deliver a seamless end-to-end solution.

"Nortel Networks is committed to redefining network economics by delivering highly-reliable optical solutions that drive substantial operational and capital savings," said Brian McFadden, president, Optical Networks, Nortel Networks. "We are pleased that Boeing has selected Nortel Networks to build this nationwide network, and confident that we will help position Boeing to offer services based on the latest and most reliable technology."

With more than 12,000 network elements installed worldwide, OPTera Long Haul 1600 enables service providers to optimize their networks through data native interfaces and flexible OADM capabilities. Additionally, OPTera Long Haul 1600 offers multiservice capabilities, scalability and full interworking functionality with other elements of the network like OPTera Metro 3500. This helps position service providers to realize significant reductions in lifecycle costs, while providing an easy-to-manage, `future proof' platform designed to address current and future needs.

Nortel Networks next generation SONET platform, OPTera Metro 3500, is a highly scalable multiservice platform that offers the highest bandwidth management flexibility in the industry. OPTera Metro 3500 sets the benchmark in cost-efficient delivery of voice, video and data traffic in any enterprise environment. OPTera Metro 3500 leverages resilient packet ring (RPR) technology to provide high bandwidth delivery, efficient bandwidth sharing, cost-effective data networking, and carrier grade availability and scalability.

Deployed in more than 1,000 customer networks in 45 countries, Nortel Networks Optical Networks portfolio includes photonics (DWDM), next generation SONET, optical switching, and Optical Ethernet products. Nortel Networks ranked #1 in the global metro DWDM market for 2001, according to the Dell'Oro Group, IDC and RHK. Nortel Networks ranked #1 in multiservice SONET/SDH for 2001, according to the Dell'Oro Group.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro and Enterprise Networks, Wireless Networks and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

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 severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to meet financial covenants contained in our credit agreements; the ability to make acquisitions and/or 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; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Nortel Networks, the Nortel Networks logo, the Globemark and OPTera are trademarks of Nortel Networks.