Nortel Networks Sets Stage for Mass Deployment of Multimedia Communications with Open Client Strategy.

CHICAGO -- i3 micro, Polycom, Texas Instruments, Uniden Announce Support for Global SIP Initiative

Nortel Networks (NYSE:NT)(TSX:NT), building on its Session Initiation Protocol (SIP) leadership, today announced a global initiative designed to dramatically increase the market adoption and deployment of SIP-based multimedia services in consumer and enterprise markets.

As part of its open client strategy, Nortel Networks will make available a comprehensive documentation suite to enable third-party development and testing of SIP-based clients and terminals interoperable with Nortel Networks Multimedia Communication Server (MCS) 5100 and 5200 products.

In support of this initiative to promote industry-wide SIP adoption, Texas Instruments Incorporated (NYSE:TXN) plans to adapt its voice over Internet Protocol (VoIP) reference designs for SIP-based customer premises equipment (CPE) such as terminal adapters, VoIP gateways and IP phones to achieve Nortel Networks MCS interoperability. In addition, third-party vendors Uniden America Corporation, i3 micro, and Polycom (Nasdaq:PLCM) are developing or plan to develop MCS interoperable SIP clients and terminals in their consumer and enterprise products.

SIP is strategic to mass market deployment of multimedia services because it brings Internet-style innovation to the traditional world of carrier voice services. SIP establishes real-time communication sessions in IP networks that contain any combination of media (voice, video, data, etc.) and can be as basic as a voice call or as complex as a multi-party mixed media conference. With SIP, service providers can harness the power and ubiquity of IP to create innovative new services that combine elements from telephony and other Web applications like e-mail, messaging, presence and video streaming.

"Today's announcement further supports Nortel Networks global vision of transforming networks, eliminating boundaries and enriching communications," said Sue Spradley, president, Wireline Networks, Nortel Networks. "Making our SIP client interoperability specification available to a broad range of client and terminal vendors across the industry helps accelerate the delivery of multimedia communications to mainstream consumers and enterprises, putting SIP clients in every home and on every desktop."

As a leading provider of software and digital signal processing (DSP) technology for VoIP SIP CPE devices, Texas Instruments will offer MCS interoperable reference designs to a vast array of IP phone and CPE manufacturers and designers that use its VoIP solutions. This initiative will significantly expand the availability of MCS interoperable clients to all markets - service providers, enterprise and consumers.

Uniden, a leading manufacturer of wireless consumer electronics products, also intends to make its suite of enterprise SIP terminals and a planned suite of SIP consumer VoIP solutions interoperable with Nortel Networks MCS client.

i3 micro technology, a leading provider of voice over IP (VoIP) CPE products and related management solutions, plans to extend its existing Vood (Voice Options on Demand) VoIP product interoperability with Nortel Networks to include the MCS SIP specification. Nortel Networks open client strategy and i3 micro's CPE-based value added SIP applications will drive new revenue opportunities for service providers and their MCS customers.

Polycom, a leader in unified collaborative communications solutions, is implementing MCS SIP compatibility on its line of Polycom VSX video conferencing systems, its MGC voice and video conference bridges and on its series of SoundPoint IP desktop phones.

Service providers will benefit from Nortel Networks open client strategy by being able to more effectively address the divergent needs of the consumer, small, medium and large enterprise marketplaces with a wider range of CPE choices for their customers and more flexible packaging options.

Bell Canada, which recently launched its Managed IP Telephony solution, is leading the way as businesses move to an IP world. Bell Canada will be positioned to offer customers a greater variety of SIP-based communications devices. In addition, through creation of joint innovation centers with Nortel Networks last year, Bell Canada and Nortel Networks continue to focus on creating new services based on IP telephony and multimedia capabilities.

As part of its open client strategy, Nortel Networks also plans to provide vendors with a Theme Designer Kit (TDK) that will allow vendor participants to modify the look and feel of the MCS multimedia PC soft client. The TDK tool will make it possible to easily modify the format of the client to meet service provider branding requirements or provide end users with the ability to customize the look and feel of the client by selecting different combinations of colors, backgrounds and other thematic elements. The TDK is expected to be available in the fourth quarter of 2004.

Vendors wanting to participate in Nortel Networks industry-wide SIP initiative can request access to the MCS documentation suite by completing an application available on Nortel Networks Developer Program Web site. In the future, vendors will also be able to access the TDK from the same location.

Nortel Networks is a worldwide leader in delivering SIP innovation with customers and partners like Bell Canada, Charter Communications, Dacom, Erlanger Health System, the FedEx Institute of Technology at the University of Memphis, the University of Michigan, Monster, OneConnect, SBC, SaskTel, Sungard, TeliaSonera, Texas A&M University and Verizon Communications.

Nortel Networks Multimedia Communications Portfolio, including both MCS 5100 and MCS 5200, delivers advanced multimedia and collaborative applications through the same commercially available hardware and open-standards software. This portfolio delivers the scale and functionality necessary for both enterprises and service providers to address their target markets. It transforms the way users communicate by enabling next generation tools that improve productivity and facilitate ubiquitous access to communications services. Nortel Networks will be demonstrating its MCS 5200 product on booth #11326 during SUPERCOMM 2004 in Chicago.

For the entire year of 2003 and the first quarter of 2004, Nortel Networks ranked #1 in the global markets for voice over packet ports shipped and global softswitch revenue, according to Synergy Research Group.

Nortel Networks has a proven portfolio of products and services for packet voice and multimedia services. Nortel Networks is providing Nortel Networks Succession voice over packet solutions to a number of leading operators, including Bell Canada, Cable & Wireless Cayman Islands, Charter Communications, China Netcom, China Railcom, Cox Communications, Hong Kong Broadband Network, MCI, Sprint and Verizon Communications.

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 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 of its previously announced or filed financial results; the impact of the management changes announced on April 28, 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 potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; continued reductions in 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 control; 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.

Nortel Networks, the Nortel Networks logo, the Globemark, Business Without Boundaries and Succession are trademarks of Nortel Networks. Polycom, VSX, MGC and SoundPoint are trademarks of Polycom in the U.S. and various countries. Vood is a trademark of i3 micro technology.

Use of the terms "partner" and "partnership" does not imply a legal partnership relationship between Nortel Networks and any other party.