Nortel Networks Unveils Enterprise Strategy, New Converged IP Telephony Products; `One Network. A World of Choice.' Initiative Offers Substantial Benefits for Businesses.

Business Editors & High Tech Writers

ATLANTA--(BUSINESS WIRE)--Oct. 29, 2002

Nortel Networks (NYSE:NT)(TSX:NT.) today announced the company's enterprise strategy to deliver end-to-end voice, data, multimedia and converged Internet Protocol (IP) solutions that are designed to enable businesses of all sizes to drive increased revenues, reduced costs, enhanced customer service and increased productivity.

This strategy, based on Nortel Networks enterprise vision called 'One network. A world of choice.' offers a unique model that will position businesses to engage their customers in ways previously unattainable. The goal is to provide enterprises with the ability to anticipate and deliver on customer needs with unprecedented speed using virtually any communications channel.

"Nortel Networks enterprise strategy not only shows their ongoing commitment to the enterprise market, but also demonstrates leadership in understanding the future of enterprise networks and their role in driving better relationships with their end customers, channel partners, suppliers and employees - which ultimately has significant upside to a business' bottom line," said Zeus Kerravala, vice president of enterprise infrastructure, Yankee Group.

Supporting this strategy, Nortel Networks also announced today three critical enablers of high-performance converged networks - Nortel Networks Succession Communication Server for Enterprise (CSE) 1000 Release 2.0, Nortel Networks CallPilot Release 2.0, and Nortel Networks BayStack 460-24T-PWR Power over Ethernet Switch.

Succession CSE 1000 Release 2.0 is a robust, reliable and fully distributed IP private branch exchange (PBX) solution that allows customers to maximize their wide (WAN) and local area (LAN) network investments by converging voice and data while optimizing business-critical applications and features.

CallPilot Release 2.0 offers more than 40 new, advanced features and capabilities - including Symposium Call Center Server integration, a new mobility bundle, and fully functional Web browser interfaces - to the world's leading unified messaging platform.

BayStack 460-24T-PWR Power over Ethernet Switch will further extend Nortel Networks voice over IP product portfolio. Equipped with robust, industry-proven quality of service functionality to eliminate latency in voice over IP (VoIP) traffic, it is a resilient, secure, stackable switch that provides Power over Ethernet (PoE) capabilities to IEEE P802.3af compliant devices such as IP phones, wireless access points, and net cameras. Nortel Network plans to begin shipping the BayStack 460 in January 2003. These products demonstrate Nortel Networks on-going commitment to delivering on the needs of the enterprise market, and complement the company's history of investment protection.

"In our business, it is essential to share information globally, and whether it's in the form of data or voice communications, we need to be certain that our network serves our customers and employees," said Mark Brubaker, senior vice president, Countrywide. "Since the nature of the financial services business is such that our network is required to operate in the worst of conditions, including disaster situations and other events that cause stress to the communications infrastructure, we need constant uptime, with redundancy, resilience and graceful degradation features."

"More importantly, we need a single network that can accommodate users by any means including data, fax, e-mail and voice communications. Nortel Networks offers a strategy to position us to deliver responsiveness to our customers, even under the most difficult circumstances while driving to keep our operational expenses low," Brubaker said.

'One network. A world of choice.' is based on the idea that by creating an engaged business model, information can be disseminated beyond its native format, eliminating the boundaries for accessing the communications infrastructure as well as the need to carry multiple devices in order to share information. Providing industry-leading solutions in VoIP, data and optical networking, Nortel Networks offers its enterprise customers the simplicity and cost-savings of converged networks, information sharing across platforms, `five nines' reliability and simplified deployment of security measures.

"Many networks today are a combination of components targeted at serving narrow sets of users, applications and services without consideration of the benefits of a converged communications architecture," said Oscar Rodriguez, president, Enterprise Networks, Nortel Networks. "Our strategy, built around our `One network. A world of choice.' vision, challenges the current paradigm of network design by focusing on our enterprise customers and meeting their requirements to serve their customers, while increasing the productivity of their workforce and minimizing capital and operational expenses."

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 severity and duration of the industry adjustment; 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; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to meet financial covenants contained in our credit agreements; the ability to make acquisitions and/or 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; 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; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of increased provision of customer financing and commitments; stock market volatility; the entrance into an increased number of supply, turnkey, and outsourcing contracts which contain delivery, installation, and performance 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. For additional information with respect to certain of these and other factors, see the reports 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, Succession, CallPilot, Baystack and Symposium are trademarks of Nortel Networks.

Nortel Networks will detail its enterprise strategy in a Web cast beginning at 11 a.m. EDT today. To participate, please visit: www.nortelnetworks.com/convergediptelephony_eseminar