Kaohsiung City Selects Nortel Networks to Provide Wireless Mesh Network Solution; New Public Wireless Network Expected to Offer Convenient Access to Information, Services.

TAIPEI, Taiwan -- The southern city of Kaohsiung has selected eASPNet Taiwan Inc., a Nortel Networks channel partner and joint venture company, to provide a secure, reliable public wireless local area network (LAN) based on an advanced Wireless Mesh Network solution from Nortel Networks (NYSE:NT)(TSX:NT).

Nortel Networks Wireless Mesh Network solution features an enhanced LAN architecture that is designed to go beyond traditional Wi-Fi hot spots to provide secure wireless coverage indoors and outdoors throughout an urban area or large campus.

The first phase of this build out of this new wireless network is expected to be completed by December 14, 2004 in three Kaohsiung districts - Chien Chin, Hsin Hsing and Ling Ya.

"The wireless platform we are implementing for Kaohsiung City Government will enable public access to comprehensive information on a wide range of government services, such as consumer affairs, firefighting, infrastructure construction, online learning, police assistance, transport and travel updates, as well as art and recreation," said Tony Wu, chief operations officer, eASPNet. "We will work closely with the Kaohsiung city administration to introduce to residents innovative broadband wireless services and help users fully realize the potential of wireless mesh networking by delivering voice, video and interactive multimedia services in one seamless communication session."

"In addition, the increase in coverage enabled by this wireless network will support new business opportunities in software applications," Wu said. "And when this project is operational, Kaohsiung will be a mobile city, underscoring our continuing commitment to supporting the government in its pursuit of its 'M-Taiwan' vision."

"We are extremely pleased to work with eASPNet on this milestone project," said Jackson Wu, managing director, Nortel Networks Taiwan. "Our Wireless Mesh Network solution will enable a common public wireless LAN platform for Kaohsiung firefighters, building contractors, news services, police, and transport organizations, providing more efficient use of resources as well as the convenience of integrated wireless communications."

The first phase of this project will include development of network core facilities and deployment at City Hall, City Council, Hsin Kong Pier and the Kaohsiung Culture Center. Additionally, the City plans to have traffic lights and light poles available for wireless mesh deployment in Chien Chin, Hsin Hsing and Ling Ya. eASPNet expects to complete phase two of the project within six months of contract signing, bringing the total network build out and wireless broadband service coverage area to 80 percent.

Nortel Networks Wireless Mesh Network solution for Kaohsiung includes Nortel Networks Wireless Access Point 7220 and Wireless Gateway 7250. This solution significantly reduces the cost of transporting high-speed wireless data from Wi-Fi networks to broadband networks and allows the city of Kaohsiung to install wireless LANs in areas where it is difficult or cost-prohibitive to run cables. This approach can drastically reduce the complexity and cost of deploying a traditional wireless LAN.

This solution for the city of Kaohsiung also includes Nortel Networks Optivity Network Management System (NMS) to provide centralized facilities for monitoring and managing network operations. The city of Kaohsiung will be positioned to offer such services as geographical information, with plans to integrate the Optivity NMS with services like camera monitoring; vehicle identification; real-time wireless transmission of images from accident sites; and voice over IP (Internet Protocol) and multimedia communications.

For this project, eASPNet will affiliate with some of the leading worldwide IT companies, including Intel, Microsoft, Acer, Hitron, and Kingsbeam.

About eASPNet Taiwan Inc.

eASPNet, a joint venture of Nortel Networks, provides a complete array of Internet Data Center (IDC), Application Service Provider (ASP) and IT Outsource Service that enterprises can rely on. eASPNet's high speed and fully redundant network connected with its IDC offers a wide range of superior solutions. eASPNet's 4 pillar services include Hosting Service, Value-Added Network Service Center, Solution Integration and Outsourcing Service. Enterprises may locate business at eASPNet, who will assist enterprises to open the world of Internet opportunities and take advantages of eASPNet's one-stop eBusiness and eOutsourcing services.

About Nortel Networks

As a global innovation leader, Nortel Networks enriches consumer and business communications worldwide by offering converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks 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 planned restatement or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 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 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 controls; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; 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 and Nortel Networks cash flows; 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; 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.

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