Coral Wireless Selects Nortel to Build New Mobile Network in Hawaii.

DALLAS -- Wireless Broadband Technology to Support Delivery of Innovative, High-Speed Wireless Voice, Data Services

Coral Wireless, the newest mobile operator in Hawaii, has selected Nortel (NYSE:NT) (TSX:NT) as the sole infrastructure supplier for its PCS network in Hawaii. Coral Wireless plans to launch Hawaii's first unlimited-use wireless voice and data network in early 2006.

Coral Wireless will use Nortel's CDMA2000 1X wireless infrastructure, which is designed to optimize network efficiency and enable superior voice quality. Nortel's technology will also support delivery of advanced, high-speed data services like Web browsing, streaming audio and video, and multimedia messaging to nearly 900,000 potential subscribers on the island of Oahu. Coral Wireless plans to offer unlimited local and long distance calling for under US$50 per month, with additional voice and data features available for consumers to customize a plan to their needs.

"Coral Wireless is dedicated to bringing the most innovative communication services to Hawaii," said Bill Jarvis, chief executive officer, Coral Wireless. "As the first and only company in Hawaii to offer a simple and affordable alternative to traditional wireless services, we selected Nortel as our infrastructure supplier because of their proven track record in CDMA technology and vast experience in deploying wireless broadband networks across the globe."

"This represents a new footprint for Nortel and demonstrates our continued leadership position in providing high-quality and high-capacity solutions that allow non-traditional carriers like Coral Wireless to penetrate new markets and offer advanced wireless data services that subscribers desire," said Richard Lowe, president, CDMA Wireless Networks, Nortel. "We look forward to supporting Coral Wireless in their efforts to provide Hawaii users with mobile voice and data service."

As part of the new agreement, Nortel will supply CDMA2000 1X wireless radio and access equipment and related professional services including Nortel's CDMA Packet MSC and Nortel's Compact Metro Cell BTS.

Nortel's CDMA Packet MSC is a proven, turnkey, packet-based wireless switching solution that allows operators to gracefully transition operations to an all IP network. Nortel's Compact Metro Cell BTS is a highly flexible, scalable and power-efficient 3G base station that offers 'pay as you grow' flexibility and modular design, ensuring maximum investment protection for wireless operators.

Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries across the globe. 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.

About Coral Wireless

Coral Wireless is Hawaii's only local wireless provider to offer affordable, unlimited, flat-rate local and long distance wireless calling plans. With the launch of Coral Wireless commercial service in early 2006, Hawaii consumers can, for the first time ever, purchase local wireless service that requires no contracts, no complicated rate plans and no credit checks. Coral's mobile voice and data network will serve the island of Oahu with unlimited local and domestic long distance service. For more information about Coral visit www.coralwireless.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 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;

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.

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.

Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks. CDMA2000 is a trademark of the Telecommunications Industry Association (TIA).