Cable Onda Selects Nortel to Build Voice over IP Network in Panama.

PANAMA CITY, Panama -- Cable Onda, a leading cable service provider in Panama, has selected a cable voice over Internet Protocol (VoIP) solution from Nortel (NYSE:NT)(TSX:NT) to enhance its current service portfolio and offer IP (Internet Protocol) broadband services to its customers.

Nortel will implement a VoIP infrastructure for Cable Onda, positioning the service provider to offer cable VoIP services like integrated voice and video communications and IP Telephony to both residential and enterprise customers in Panama beginning in January 2005. Cable Onda plans to offer customers the option of keeping their existing phone number when they move anywhere within the Cable Onda network.

"At Cable Onda, we are always focused on exceeding our customer's expectations, bringing them sophisticated services that enhance the way they work or play," said Edgar Peregrina, corporate manager, Voice Services, Cable Onda. "Only Nortel's proven cable VoIP solutions are able to give us the flexibility and scalability we require to cost-effectively respond to current and future demand for advanced services."

Cable Onda's new VoIP infrastructure will be based on Nortel Communication Server (CS) 2000 - Compact. The PacketCable qualified CS 2000 - Compact enables cable operators like Cable Onda to deliver the full suite of traditional voice services to business and residential customers on a packetized network with voice and data traffic sharing the same communications lines to provide more efficient and cost-effective use of existing transmission capacity. Also included in this deployment will be Nortel Packet Voice Gateway (PVG), designed to help switch voice calls more cost-effectively.

"As a leading provider of advanced telecommunication solutions in Latin America, we are keenly aware of the regional requirements and can deliver those solutions that can truly help our customers achieve their business objectives and enhance human experience through communications," said Manuel Terrero, vice president, Wireline Networks, Caribbean and Latin America, Nortel. "Nortel cable VoIP solutions help innovative service providers like Cable Onda deliver new value-rich services that are more cost-effective and efficient than traditional solutions."

Nortel solutions are designed to help cable operators drive new revenue opportunities and reduce operating costs. Nortel's comprehensive integrated cable solutions span video and video on-demand transport, voice and multimedia communications, high-speed data services, managed network services for business customers, and next generation access.

Nortel continues to execute on its three commitments to the cable service provider market -- new product development geared specifically to cable applications; commitment to the technology and standards organizations that serve the cable industry; and implementing real-world solutions that address the fundamental business and networking challenges of cable operators.

For the entire year 2003 and the first half of 2004, Nortel ranked #1 in the global markets for carrier packet voice and softswitch revenue, according to Synergy Research Group (SRG). Nortel, which has a proven portfolio of products and services for packet voice services, is providing PacketCable qualified solutions to several leading cable operators, including Charter Communications, Cox Communications, VTR (Chile), TeleCable (Spain), Telenet (Belgium) and ish and Kable BW (Germany).

About Cable Onda

Cable Onda is the largest telecommunications company in the Republic of Panama, serving the Panama City, Western Panama and Colon markets. It is composed of two principal business sectors, Entertainment and Communication. For more information, please visit www.cableonda.com.

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 Nortel's independent review and planned restatement or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel's filing obligations on support facilities and public debt obligations; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 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; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; the communication by Nortel's auditors of the existence of material weaknesses in internal controls; Nortel's ability to recruit and retain qualified employees; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; 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 flows; 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 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; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of Nortel's purchase contracts; 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; the future success of Nortel's 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 with the United States Securities and Exchange Commission. 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.

Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks. PacketCable is a trademark of Cable Labs, Inc.