Nortel Networks to Offer Customers Additional Choice in IP Telephony Deployment; New Software, Product Release to Provide Migration Options, Innovative Applications.

Business Editors/High-Tech Writers

LAS VEGAS--(BUSINESS WIRE)--June 9, 2003

Nortel Networks (NYSE:NT)(TSX:NT) unveiled today at Global Connect 2003, the annual conference of the International Nortel Networks Meridian Users Group (INNMUG), Nortel Networks Succession Enterprise Software Release 3.0. Release 3.0 is designed to provide a common software platform for Nortel Networks Succession 1000 IP (Internet Protocol) and Nortel Networks Meridian 1 IP-ready PBX (private branch exchange) systems.

Part of Nortel Networks 'One network. A world of choice.' global enterprise vision, Succession 3.0 will offer a seamless migration path from TDM-based Meridian 1 systems to Succession 1000 IP PBX. Succession 3.0 is expected to be available in the fourth quarter of 2003. It will give Nortel Networks enterprise customers additional choices for enhancing the value of existing communications systems, while positioning them to migrate to a highly-featured IP PBX network architecture at their own pace.

Succession 3.0 is designed to give businesses a richer set of applications and features from which to choose. It will allow self-paced integration of multimedia, contact center, self-service IVR (interactive voice response) and advanced IP networking capabilities from the comprehensive portfolio of Nortel Networks enterprise solutions. In addition, it will feature a variety of enhancements, including: call server and gateway redundancy; increased IP Telephony scalability; distributed access to applications; and intelligent call routing.

"Nortel Networks has a history of providing customers with valuable IP Telephony choices that offer investment protection and business value," said Marianne Collin, president, INNMUG. "With Succession 3.0, Nortel Networks seamless migration path will provide enterprise users access to all the benefits of IP telephony with just a simple upgrade."

Also new with Succession 3.0 will be a highly-scalable, fully-redundant version of Succession 1000 - called Succession 1000M. This new version will support 10,000 IP users per call server, and multiple server networking to support tens of thousands. Succession 1000M is also designed to enable distribution of IP users across wide area networks (WANs), along with 'end-to-end' data connections.

"Succession 3.0 will combine flexibility, reliability and redundancy options to provide our enterprise customers with the optimum evolutionary path to convergence," said Oscar Rodriguez, president, Enterprise Solutions, Nortel Networks. "Whether they choose to deploy an IP PBX solution or to migrate to IP functionality in stages, Succession 3.0 will give both new and existing customers unparalleled choice when it comes to migrating to IP Telephony. And they will be able to do so at a pace that matches their rate of technology adoption without sacrificing business and investment protection requirements."

Succession 3.0 is designed to provide seamless inter-working with Nortel Networks Multimedia Exchange (MX), a Session Initiation Protocol (SIP)-based enterprise multimedia and collaborative application delivery solution that is part of Nortel Networks Multimedia Communications Portfolio.

Succession 3.0 users will be able to incorporate their telephony software 'clients,' and to take advantage of new MX applications including Collaboration (Conferencing, Whiteboard, File Exchange, Web Push and co-browsing), Personalization (Call Screening, Call Logs, Call Management and Routing), Multimedia (Video Calling, Picture Caller ID) Presence, and Instant Messaging.

These new applications, coupled with the feature richness of Succession 3.0, will position enterprises to better serve the needs of highly mobile and geographically distributed workforces by providing ubiquitous access to applications that can drive greater productivity and lower costs.

Nortel Networks also plans to offer a wide range of data applications for its family of IP phones as part of Succession 3.0. These capabilities will be available in cooperation with Net6 (www.net6.com), a member of the Nortel Networks Developer Program.

Net6 Transformation Gateway will turn Nortel Networks i2004 Internet Telephone into an information appliance by delivering applications to the screen. In an enterprise setting, any phone will be capable of providing a 'dashboard' to keep management, factory workers, call center supervisors, and other employees informed of company news and events, sales bookings, inventory levels, stock quotes, IT application status, and human resources information. In industries like retail and hospitality, companies will be positioned to drive new revenues from their IP telephony investment by giving callers the ability to view information and advertisements on i2004 phones, and to call advertisers directly.

"Through integration with Nortel Networks i2004 IP telephones, the Net6 Transformation Gateway will deliver highly visible new applications to users of IP telephones," said Gordon Payne, chief marketing officer, Net6, Inc. "IP telephony is not just about cost reduction anymore. There is now a user pull for new, advanced applications."

The Net6 Transformation Gateway also delivers business applications to wireless devices like PDAs (personal digital assistants), wireless e-mail devices, pagers, and Web-enabled mobile phones. With Succession 3.0, an enterprise customer's IT staff will be able to transform high-value business applications for use on i2004 phones and wireless devices with Net6 Design Studio, an intuitive 'point-and-click' development environment that simplifies application transformation, provides rapid prototyping, and facilitates ease of deployment.

Additional Succession 3.0 enhancements will support the entry-level i2001 Internet Telephone and a new, survivable small branch gateway for five to 50 users. Succession 3.0 will also enable increased productivity for mobile workers with features like Virtual Office, allowing full access to office desktop functionality while traveling. Further enhancing user mobility, Succession 3.0 will support Nortel Networks i2050 Mobile Voice Client for wireless IP telephony on hand-held PCs. The i2050 Mobile Voice Client is a key element of the Nortel Networks wireless LAN (local area network) portfolio announced in March 2003.

'One network. A world of choice.' is about raising the bar with a new level of customer and employee engagement where and how the network is accessed while offering enterprises the power of choice in deployment options through industry-leading solutions in IP Telephony, applications, data and optical networking.

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 customer financing and commitments; stock market volatility; the entrance into an increased number of supply and outsourcing contracts which 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. 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.

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