Cable & Wireless and Nortel Networks Plan to Work Together on Marketing of Data and IP Solutions.

Business Editors/Hi-Tech Writers

LONDON--(BUSINESS WIRE)--Nov. 13, 2000

Cable & Wireless (NYSE:CWP), the global telecommunications group, and Nortel Networks(a) (NYSE/TSE:NT) have signed a Memorandum of Understanding which sets out their intention to complete by year-end a global marketing agreement.

Subject to execution of a definitive agreement, the companies will market Cable & Wireless data and IP (Internet Protocol) products and services through Nortel Networks global sales channels. Cable & Wireless expects to gain incremental annual revenues of US$200 million through this effort over 10 years.

Products and services that are expected to be marketed through this relationship will position customers of all sizes - from multinational corporations to global financial institutions and small- to medium-size businesses - to migrate from existing legacy PBX networks to networks based on IP solutions from Nortel Networks.

"This announcement builds on our strategy to work closely with a few world class companies to deliver Cable & Wireless data and IP products and services to businesses in the U.S., Japan and Europe," said Don Reed, Chief Executive, Global Services, Cable & Wireless. "By linking up with Nortel Networks, we believe we will deliver quality solutions to a wider market."

The anticipated agreement also includes plans for Nortel Networks to increase its own use of the Cable & Wireless global network by employing it as one of its global suppliers to carry Nortel Networks' own internal traffic.

"We're furthering our efforts to build the high-performance Internet globally by extending our already close relationship with Cable & Wireless into the marketing of data and IP services," said Pascal Debon, President, Nortel Networks EMEA (Europe, Middle East, Africa). "In the process, we are helping to position Cable & Wireless to bring in significant new revenue opportunities."

Reed said, "Relationships like this will mean more efficiencies in business, creating greater convergence, and at the end of the day, a better deal for customers."

About Cable & Wireless

Cable & Wireless is a major global telecommunications business with revenue of over (pound)9 billion (US$14 billion) in the year to 31 March 2000 and customers in 70 countries. Its operations around the world offer a full range of telecommunications services. Cable & Wireless' focus for future growth is on IP (Internet protocol) and data services and solutions for business customers.

It is developing advanced IP networks and value-added services in the US, Europe and the Asia-Pacific region in support of this strategy. With the capability of its global IP infrastructure and its strength in key markets, Cable & Wireless holds a unique position in terms of global coverage and services to business customers.

About Nortel Networks

Nortel Networks is a global Internet and communications leader with capabilities spanning Optical, Wireless, Local Internet and eBusiness. The Company had 1999 U.S. GAAP revenues of US$21.3 billion and serves carrier, service provider and enterprise customers globally. Today, Nortel Networks is creating a high-performance Internet that is more reliable and faster than ever before. It is redefining the economics and quality of networking and the Internet, promising a new era of collaboration, communications and commerce. Visit us 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 impact of price and product competition; the dependence on new product development; the impact of rapid technological and market change; the ability of Nortel Networks to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of consolidations in the telecommunications industry, the uncertainties of the Internet; stock market volatility; the ability of Nortel Networks to recruit and retain qualified employees; and the impact of increased provision of customer financing by Nortel Networks.

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. 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.

Cable & Wireless and the Globe Device are registered trademarks of Cable and Wireless plc

(a) Nortel Networks, the Nortel Networks logo and the Globemark are trademarks of Nortel Networks.