Mobistar Selects Nortel Networks for Belgian 3G Wireless Network; New UMTS Broadband Network to Boost Capacity, Enable 3G Data Services.

BRUSSELS, Belgium -- Mobistar, Belgium's second largest wireless operator, has selected Nortel Networks (NYSE:NT)(TSX:NT) as the sole provider of third generation (3G) radio equipment to upgrade its national wireless network.

Under an agreement announced today, Nortel Networks will deploy UMTS (Universal Mobile Telecommunications System), EDGE (Enhanced Data for GSM Evolution), GSM (Global System for Mobile Communications) and Multiservice Switching equipment to position Mobistar to accommodate more user traffic and support a broad range of sophisticated data services that can increase productivity for enterprises, business users and consumers.

Nortel Networks wireless equipment is designed to create networking efficiencies that can help service providers drive significantly reduced operating costs. UMTS supports broadband data speeds up to 384 kilobits per second (Kbps) -- 10 times faster than wireline dial-up access. This will help position Mobistar to drive new revenue opportunities through broadband data services like e-mail access with large attachments, Internet browsing, personalized content, and video streaming and conferencing. Mobistar will use Nortel Networks Multiservice Switch 7400 series to aggregate 3G access traffic for additional operating and capital savings.

Under the upgrade agreement, Nortel Networks will be the sole provider of Mobistar's 3G radio equipment moving forward. Nortel Networks previously supplied about one-half of Mobistar's second generation wireless radio network. The 3G network upgrades will be deployed on top of Mobistar's existing wireless network and will not impact current services, coverage or quality of service.

"As leading operators across the world like Mobistar finalize their 3G migration plans, more and more are turning to Nortel Networks as a trusted 3G networking ally," said Peter MacKinnon, president, GSM/UMTS, Nortel Networks. "As evidenced by our recent string of 3G successes, operators understand that our expertise in wideband radio access and data networking give us a real advantage in turning up these networks quickly and cost effectively."

The upgrade agreement calls for Nortel Networks to deploy Node B Internet base transceiver stations (BTS) and Radio Network Controllers (RNCs) for Mobistar. The Nortel Networks hardware is HSDPA (High Speed Downlink Packet Access)-ready and is designed to cost-effectively upgrade to support HSDPA through a software installation. Nortel Networks will also provide Mobistar with network planning, optimization and start-up operations to support deployment and initial operation of the network.

Mobistar is a member of the Orange group of wireless operators. In September 2003, Orange selected Nortel Networks as one of three radio technology vendors to support its Pan-European 3G network build out. Nortel Networks recently launched 3G networks with Orange in Cannes, Nice, Lyons and Marseille, France and is deploying 3G across the entire Provence - Cote d'Azur and Rhone Alpes regions of southern France. Nortel Networks and Orange initially deployed the Cannes 3G network over only five months and in time to showcase live 3G capabilities at 3GSM World Congress 2004, the industry's largest trade forum.

The 3G upgrade agreement builds on a long-term relationship between Nortel Networks and Orange. Nortel Networks has contributed to the international France Telecom SA/Orange mobile network for more than 15 years. Nortel Networks provides equipment for Orange networks in France and five other Orange networks across Europe.

Nortel Networks is working on UMTS network deployments with leading operators across the globe, and has extensive experience in deploying and tuning large-scale, code-based networks, and in using IP (Internet Protocol) technology to enhance operating efficiency for wireless operators. Overall, there are now more than 25 mobile operators globally that have deployed Nortel Networks Multiservice Switches for a variety of packet transport applications in external (2G, 2.5G, 3G) and internal (enterprise, OA&M, billing) networks.

Nortel Networks has designed, installed and launched more than 300 wireless networks in over 50 countries. Nortel Networks 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.

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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