Nortel Networks Introduces Usage-Based Internet Access Solution Using Shasta 5000 BSN; Innovative Service Enables Pre-Paid Internet Access, On-Demand Bandwidth Flexibility.

Business Editors/High-Tech Writers

DALLAS--(BUSINESS WIRE)--Nov. 24, 2003

Nortel Networks (NYSE:NT)(TSX:NT) today introduced a Usage-Based Internet Access solution that enables service providers to expand and accelerate customer adoption of broadband services through innovative new service models.

Based on Nortel Networks Shasta 5000 Broadband Service Node (BSN), this solution positions service providers to offer pre-paid Internet access, giving residential and business customers a choice between unlimited access at a fixed price and flexibly priced access based on time and bandwidth used. It also allows those customers to choose their own service levels in real time.

Nortel Networks Usage-Based Internet Access solution allows service providers to attract a larger base of Internet users to broadband via low entry-cost service models, rather than simply discounting existing broadband pricing.

"A large percentage of the Internet population remains reluctant to switch from dial-up to broadband," said Sue Spradley, president, Wireline Networks, Nortel Networks. "A usage-based or pre-paid broadband service offers Internet users who remain skeptical about broadband an opportunity to experience its benefits via a low entry-cost model. Our solution reduces the barriers to accessing broadband by providing a flexible alternative that falls in between basic dial-up and traditionally higher-priced 'unlimited access' service plans."

"Nortel Networks introduction of a pre-paid, on-demand Internet Access solution with Shasta 5000 BSN is truly an industry first," said Roz Roseboro, program director, Switching and Routing at RHK. "This new solution will help enable broadband cable and DSL providers to expand their addressable market and speed their broadband services penetration."

Using Shasta 5000 BSN and a customizable personal content portal based on Shasta NetRIO Service Management Center (SMC), subscribers are able to choose their own access bandwidth, view daily updates of service use and control Internet access in real time. This solution provides the flexibility to upgrade to other access packages for more bandwidth and hours or switch to unlimited service. Once pre-paid service is used, customers can automatically be directed to the service portal to select a new service package. Through IP (Internet Protocol) traffic shaping and policing, service providers can guarantee the subscriber's selected Internet access bandwidth on a per-session basis. The solution also offers service providers a portal platform from which additional, on-demand services like firewalls, VPN (Virtual Private Network) access, and content management can be launched.

Nortel Networks Shasta 5000 BSN enables service providers to transition from the simple connectivity model enabled by first generation subscriber management systems to a cost-effective, network-based, value-added broadband services model. Shasta 5000 BSN supports wholesale dial, digital subscriber line (DSL), fixed and mobile wireless, metro optical and Ethernet extension, ATM, frame relay and leased-line subscribers.

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.

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 completion of the comprehensive review and the release of financial results and issuance of restated financial statements for 2000, 2001 and 2002 and the first and second quarters of 2003; the severity and duration of the industry adjustment and the continued reductions in spending by our customers; the sufficiency of our 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; fluctuations in operating results and general industry, economic and market conditions and growth rates; negative impacts on our gross margins; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and our current debt ratings; the ability to meet the financial covenant in our credit facilities; the use of cash collateral to support our normal course business activities; the dependence on our subsidiaries for funding; the impact of our defined benefit plans and our deferred tax assets on our results of operations, cash flows and compliance with our financial covenant; the 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; the dependence on new product development and our ability to predict market demand for particular products; the uncertainties of the Internet; the impact of the credit risks of our 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 our purchase contracts; the impact of the New York Stock Exchange minimum listing requirements and the proposed consolidation of our common shares; the impact of 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 ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation and intellectual property disputes. For additional information with respect to certain of these and other factors, see the most recent Form 10-Q and Form 10-K 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 and Shasta are trademarks of Nortel Networks. NetRIO is a trademark of Technica Networks LLC.