Continental Selects Solutions from Nortel Networks for Data Communications Network; Leading Supplier to Automotive Industry Goes with One-Vendor Model to Reduce Costs.

Business Editors/High-Tech Writers

FRANKFURT, Germany--(BUSINESS WIRE)--April 22, 2004

Continental plans to reconstruct and expand its global data communications network under a frame agreement with Nortel Networks (NYSE:NT)(TSX:NT) announced today. The agreement covers Nortel Networks switching and security solutions and professional services.

"Continental's existing network infrastructure has grown heterogeneous over the last years while we were expanding to become one of the leading suppliers globally to the automotive industry," said Paul Schwefer, chief information officer, Continental. "We therefore have to simplify our networks, make them more cost-effective and easier to manage. We decided to go with Nortel Networks leading-edge technology in order to unify components and services more easily, and to realize cost reductions within purchase, maintenance and operations."

Continental plans to consolidate its network worldwide using Nortel Networks local area network (LAN) equipment. In preparation to support advanced new technologies and services as they become available, Continental also plans to migrate to a Gigabit Ethernet infrastructure using Nortel Networks BayStack 420/470/5510 and Nortel Networks Passport 1600/8300/8600 Ethernet Switches.

Continental expects these solutions to improve network reliability and lower ownership costs.

"This is an important milestone for Nortel Networks in the automotive sector," said Jurgen Sauerwald, enterprise sales leader, Nortel Networks Germany. "We are proud that Continental has chosen Nortel Networks as its preferred vendor for active network components, and we look forward to a long and successful relationship."

Continental is one of the leading suppliers for braking systems, chassis frame components, automotive electronics, tyres and technical elastomers. Continental's revenues in 2003 were 11.5 billion euros and it has 69,000 employees globally.

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 any further restatement of its previously announced or filed financial results; the impact of the inability to meet Nortel Networks filing obligations on credit and 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; Nortel Networks ability to meet the financial covenants in its credit facilities; 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, Nortel Networks cash flows and compliance with financial covenants; 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; risks associated with a consolidation of Nortel Networks common shares; 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.

Nortel Networks, the Nortel Networks logo, the Globemark, Business Without Boundaries, BayStack and Passport are trademarks of Nortel Networks.