China Unicom Awards Nortel Networks US$280 Million in CDMA2000 1X Wireless Contracts.

Business Editors & High Tech Writers

NEW YORK--(BUSINESS WIRE)--Oct. 21, 2002

Nortel Networks (NYSE:NT) (TSX:NT.) flagship manufacturing joint venture company in the People's Republic of China, Guangdong Nortel Telecommunications Equipment Ltd., today signed a series of contracts collectively estimated at approximately US$280 million to supply China Unicom with CDMA2000 1X digital wireless network infrastructure equipment.

Nortel Networks Univity CDMA2000 1X equipment will be used to expand China Unicom's CDMA (code division multiple access) network capacity in the provinces of Zhejiang, Shandong, Heilongjiang, Henan, and Jiangxi, and in Chongqing municipality. These expansions are expected to be complete within one year.

Nortel Networks Univity solutions will help China Unicom to improve spectrum efficiency and reduce costs. They will also position China Unicom to migrate to an all IP (Internet Protocol) packetized network.

"We are honored to be selected by China Unicom for these significant projects," said Pascal Debon, president, Wireless Networks, Nortel Networks, "and appreciative of the instrumental role the United States government has played in promotion of CDMA technology in China."

"We continue to work closely with China Unicom and other global service providers to deploy Wireless Data Networks that can help position them to drive reduced operating costs, protect capital investments, and drive profits from the growing demand for advanced communication services," Debon said. "We are proud of the market share gains we are making in China, and look forward to sharing in China Unicom's continued success in this important market."

The contracts were announced today at a ceremonial signing in New York City between Debon and Yang Xianzu, chairman, China Unicom. The signing was witnessed by Donald Evans, U.S. Secretary of Commerce, and Zeng Peiyan, chairman, China's State Development Planning Commission.

With a collective population of 387 million people, the five provinces and one municipality covered in the contracts represent 26.2 percent of China's population and 30.6 percent of its gross domestic product.

Nortel Networks and China Unicom have a strong history of working together. In May 2001, China Unicom awarded Guangdong Nortel Telecommunications Equipment Ltd. an estimated US$275 million in contracts to supply CDMA equipment. These networks have been in operation since early 2002.

Nortel Networks recently outlined its new Wireless Data Networks strategy and a new wireless brand -- Univity. Based on packetized voice, all-IP (Internet Protocol) networking, and more spectrally efficient access technologies, this strategy aims to address the industry's changing business needs for migration to next generation technologies, and to reduce the cost of transmitting network traffic by as much as ten-fold.

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.

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.

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