China Mobile to Expand Wireless Network with Nortel Solutions; Expects to Increase Subscriber Capacity by 3.48 Million, Ready Network for 3G.

BEIJING -- China Mobile, the world's largest GSM operator, has selected Nortel (NYSE:NT)(TSX:NT) to expand its digital wireless network in six regions under a series of contracts awarded since January of this year and collectively estimated at US$150 million. E[acute accent]The contracts include network optimization services from Nortel to streamline performance of the expanded infrastructure and enhance network productivity while allowing China Mobile to standardize service pricing across all regions. E[acute accent]China Mobile's GSM network expansion in the six regions will increase subscriber capacity by 3.48 million to a total of approximately 18 million. It is expected to improve network coverage and services to remote areas while providing a smooth migration to future 3G services. E[acute accent]The expansion will also support China Mobile's National Rural Network Project in the northern and western provinces of Hebei, Shaanxi and Liaoning, the municipality of Tianjin, the Xinjiang Uygur Autonomous Region, and the eastern province of Hunan. E[acute accent]"Nortel's wireless technology is playing a significant role in positioning China Mobile to bring advanced wireless broadband services to millions of people, and ensuring the world's largest GSM operator is well prepared to meet the stringent needs of China's 3G era," said Robert Mao, chief executive officer, Greater China, Nortel. "This current expansion project confirms China Mobile's continued trust in Nortel's wireless broadband technology to improve network efficiencies and help enhance the subscriber experience." E[acute accent]Nortel's end-to-end GSM/UMTS solution will provide network infrastructure, software upgrades and support services, positioning China Mobile to achieve operational efficiencies through reduced network complexity and operating expenses, as well as fast introduction of new, revenue-generating services. E[acute accent]Nortel's GSM/UMTS-based solutions are HSDPA-ready and designed to easily upgrade to support HSDPA through software installation. This gives operators the flexibility to cost-effectively upgrade their networks as needed to boost capacity to meet market demand and deliver faster services. E[acute accent]Nortel has deployed wireless networks in 17 of China's 31 provinces and municipalities, including GSM digital infrastructure equipment for China Mobile affiliate companies in the provinces of Hebei, Shaanxi, Tianjin, Xinjiang, Guizhou, Anhui, Liaoning and Hunan. E[acute accent]In June 2005, Nortel became the first wireless network supplier to complete the TL9000 registration standard for Quality Management System Requirements and Measurements across its end-to-end portfolio of hardware, software and services for HDSPA, UMTS and GSM wireless infrastructure solutions. E[acute accent]Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries. Nortel was the industry's first supplier with wireless networks operating in all advanced radio technologies -GSM/GPRS/EDGE, CDMA2000 1X and 1xEV-DO, UMTS and WLAN, and is the only end-to-end provider of all next generation wireless solutions, as well as edge and core network solutions for IP, ATM and optical transport.

E[acute accent]About Nortel

E[acute accent]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.

E[acute accent]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. E[acute accent]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 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); ongoing SEC reviews, which may result in changes to Nortel's and NNL's public filings; 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; E[acute accent]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; stock market volatility generally and as a result of acceleration of the settlement date of Nortel's forward purchase contracts; 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; and the future success of Nortel's strategic alliances. E[acute accent]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.

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