Ethernet Enhancements from Nortel Enable Service Providers to Cost-Effectively Offer Scaleable Triple Play Services.

CHICAGO -- Third paragraph, first sentence of the release should read: Danish utility company EnergiMidt recently began deployment of a Nortel ultra broadband solution to provide triple-play services to its customers across Denmark. (sted: Danish utility company EnergiMidt recently began deployment of a Nortel ultra broadband solution to provide triple-play services to its customers across the Netherlands.)

The corrected release reads:

ETHERNET ENHANCEMENTS FROM NORTEL ENABLE SERVICE PROVIDERS TO COST-EFFECTIVELY OFFER SCALEABLE TRIPLE PLAY SERVICES

Metro Ethernet Routing Switch Enhancements, Metro Ethernet Services Unit 1850 Introduced

Nortel (NYSE:NT) (TSX:NT) today introduced new products and functionality for its Metro Ethernet portfolio that are designed to eliminate technical barriers and high costs service providers face in deploying Ethernet-based triple-play services -- voice, video, data -- to residential and enterprise customers in metro and national markets. Paired with the Nortel Ultra Broadband Solution portfolio, these products offer a powerful end-to-end solution for service providers.

Enhancements to the Nortel Metro Ethernet Routing Switch (ERS) 8600 and the addition of the Nortel Metro Ethernet Services Unit (ESU) 1850 are designed to allow delivery of voice, video or data over any port, as well as the ability to securely separate end-user traffic for over 4,000 subscribers on each and every port. Combined with new Internet Protocol (IP) multicast capabilities also now available, they provide a platform capable of supporting delivery of IPTV, VoIP and Internet access services to tens of thousands of residential and enterprise subscribers using a single Ethernet infrastructure.

Danish utility company EnergiMidt recently began deployment of a Nortel ultra broadband solution to provide triple-play services to its customers across Denmark. The Metro ERS 8600 and the new Ethernet Services Unit 1850 are also deployed in the network to provide aggregation and switching of the Ethernet infrastructure, working in conjunction with the Broadband Access Services Gateway 7710 Optical Line Terminal for residential delivery of triple-play services using Passive Optical Networking (PON).

"Our services strategy required that we deploy a network that is able to support a traditional triple-play offering today while providing the flexibility and scalability to enable next generation IP-based offerings in the future," said Martin Romvig, general manager, EnergiMidt Broadband. "Providing a cost competitive offering is critical for our market penetration plans, and the unequalled support of Ethernet services in the Nortel Metro Ethernet solution made it a vital part of allowing us to achieve these service goals."

While a variety of Ethernet services have been gaining in popularity in recent years, the costs associated with deploying services to a broad customer base over a resilient Ethernet infrastructure have hindered service provider build outs. Service providers have been faced with a difficult choice between service quality and network cost. The new Nortel enhancements are designed to deliver a cost-effective Ethernet infrastructure for services at the edge of the network that maintains the carrier qualities expected by enterprises worldwide. Nortel studies and actual customer deployments have demonstrated potential savings of 25 to 50 percent over conventional Ethernet or TDM networks.

"Metro Ethernet is one of the fastest growing opportunities within wireline telecom, driven in part by emerging broadband applications such as IPTV and video on demand," said Sterling Perrin, research manager, Optical Networks, IDC. "IDC forecasts that the market for metro Ethernet equipment will increase at a 26 percent compound annual growth rate to reach (US)$5.5 billion by 2009. Improvements to equipment to enable these next generation applications reliably and at lower costs are critical to the success of both metro Ethernet equipment vendors and their service provider customers."

The Nortel Metro Ethernet solution is designed to help service providers drive greatly reduced costs by eliminating the need to build separate Ethernet infrastructure for unicast and multicast services. The Nortel Metro Ethernet solution can handle multicast (broadcast video) and unicast (voice over IP, video on demand) traffic over a single, converged Ethernet infrastructure or in combination with PON or xDSL implementations.

The Metro ESU 1850, which complements the existing Metro ESU 1800, is capable of supporting up to 12 gigabit Ethernet lines over copper or optical infrastructure. The Metro ESU 1850 provides low-cost, fully redundant backhaul of next generation DSL services, wireless access services and the like. Up to 14 Metro ESUs may be arranged in a ring topology extending from the Metro ERS 8600 to offer service providers a massively scalable Ethernet infrastructure that can support a variety of services such as Ethernet VPNs, IP-based triple-play, and 3G wireless backhaul.

Nortel Metro Ethernet products are designed for easy set up and use and are fully manageable (in or out of band) with SNMP applications such as the Nortel Product Services Provisioning and Multiservice Data Manager tools. Significant automation of the provisioning and configuration process enables quicker service activation and error-free service adjustments.

The Nortel Ethernet Routing Switch 8600 delivers high-density, high-performance Layer 2-7 switching, routing and traffic classification. More than 35,000 units and 187,000 service cards have been shipped to service provider and enterprise customers around the world.

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; 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.