CANARIE Expands World's Most Advanced Customer Empowered Research and Education Network Using Nortel Networks Optical Networking Solution.

OTTAWA -- CANARIE, Inc., Canada's advanced Internet development organization, has selected Nortel Networks (NYSE:NT)(TSX:NT) Optical Multiservice Edge 6500, an optical convergence solution that provides resilient, secure and scalable broadband connectivity. CANARIE will be using the product to support research in such fields as astronomy, bioinformatics and high energy physics.

As part of its ongoing work to position Canadians to reap the benefits of the latest technological developments, CANARIE is adding a third 10Gbps wavelength to CAnet 4, the national optical Internet research and education network that interconnects universities, research centers, government research laboratories, schools and other eligible sites nationally and internationally.

As part of this network expansion, Nortel Networks Optical Multiservice Edge 6500 was chosen to perform SONET/SDH line termination and cross-connecting functions through CANARIE's User Controlled Lightpath software. This feature of CAnet 4 gives end users the ability to provision, partition and allocate network links to other users without involving a central management organization. Already, many Canadian and international users are taking advantage of the unique capabilities of this network.

"Canada is rapidly becoming a global hub for advanced research networking. CAnet 4 provides Canada's research and education community, as well as an increasing number of international research and education communities, with flexible and scalable wide area broadband access on demand," said Bill St. Arnaud, senior director, Advanced Networks, CANARIE.

CANARIE's CAnet4 network already interconnects to most advanced research networks around the world, including SURFnet, based in the Netherlands. SURFnet connects all universities and academic hospitals and the vast majority of other institutes for higher education and research throughout the Netherlands, and is an important partner for CANARIE because of their joint leadership to global research networking. As announced in March, SURFnet is also using Nortel Networks Optical Multiservice Edge 6500 to support the high-speed networking requirements of its academic and scientific member organizations.

Introduced last fall, Nortel Networks Optical Multiservice Edge 6500 converges multiple services, architectures and network layers into one platform to enable a new set of broadband connectivity. The platform supports next-generation packet and storage services, whether on a new or existing network, and can deliver up to an estimated 30 to 40 percent in cost savings in capital and operational expenses, according to estimates provided by Nortel Networks.

"As part of our commitment to enrich global communications by transforming networks, we've developed a portfolio of innovative optical networking solutions to improve productivity, profitability and competitive advantage," said Greg Mumford, chief technology officer, Nortel Networks. "Through our work with early adopters such as CANARIE, Nortel Networks is leading the transformation to evolve our customers' network and enable new services and applications."

CANARIE is Canada's advanced Internet organization, a not-for-profit corporation that facilitates the development and use of next-generation research networks and the applications and services that run on them. By promoting collaboration among key sectors and by partnering with similar initiatives around the world, CANARIE stimulates innovation and growth and helps to deliver social, cultural and economic benefits to all Canadians. CAnet 4, Canada's national research and education network was developed and is operated by CANARIE.

CANARIE positions Canada as the global leader in advanced networking, and is supported by its members, project partners, and the Government of Canada. More information about CANARIE can be found on the Web at www.canarie.ca.

Nortel Networks offers a portfolio of Optical Networking solutions designed to transform the educational experience by delivering up to 1000 times the bandwidth of legacy services while simplifying network design through the convergence of voice, video, data and storage over a single infrastructure. More than 10,000 education customers worldwide have deployed communications infrastructure solutions from Nortel Networks, including the University of Texas at Austin, Massachusetts Institute of Technology, Seoul National University, Ohio State University, University of Ulster, Stanford University, George Mason University, Worcester Polytechnic Institute, and the Philadelphia Unified School System.

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 Wireless Networks, Wireline Networks, Enterprise 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 or www.nortelnetworks.com/media_center.

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 Nortel Networks independent review and planned restatement of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks 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; continued reductions in spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks 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 in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel Networks customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of Nortel Networks purchase contracts; the impact of Nortel Networks 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; the future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters.

For additional information with respect to certain of these and other factors, see the most recent Form 10 Q/A and Form 10-K/A 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.

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