Nortel Teams with Industry Leaders in Consumer Networking to Accelerate Mass Deployment of VoIP, Multimedia Services.

TORONTO -- Nortel (NYSE:NT) (TSX:NT), a global leader in Session Initiation Protocol (SIP) technology, continues to accelerate mass deployment of voice over IP (VoIP) and multimedia services through new strategic relationships with industry leaders in SIP-based access devices, data networking products and wireless clients.

Arcturus Networks, Inc., D-Link Corporation, Inc., Grandstream Networks, Inc., NETGEAR, SIPquest, Sipura Technology, Inc., and TABLETmedia will join previously announced Texas Instruments, i3 Micro, Polycom and Uniden as participants of Nortel's collaborative open client initiative to promote industry wide SIP adoption.

As part of Nortel's open client strategy, these companies will focus on bringing to market Nortel-interoperable SIP products to expand the availability of voice over broadband consumer applications and devices. The new consumer products will include analog terminal adapters and routers for home-based broadband voice services and software applications that extend multimedia services to wireless devices.

"Nortel is enabling communication services that profoundly enhance the human experience by giving people more choice and control in the ways they communicate," said Jim Dondero, marketing vice president, Carrier Packet Networks, Nortel. "When giants in the consumer networking space team with Nortel to deliver open, standards-based solutions, it creates a powerful catalyst for mass deployment of new SIP-based multimedia services and consumer adoption."

D-Link and NETGEAR, industry-leading providers of consumer networking products, will integrate Nortel's SIP specification into devices that provide voice and data services over wired and wireless broadband connections for homes and small offices. D-Link has implemented this capability into its DVG-G1402S Broadband Phone Service VoIP Router and is currently engaging in interoperability testing in Nortel's labs. NETGEAR also intends to make its TA612V product interoperate with Nortel solutions. These solutions from D-Link and NETGEAR enable standard phones to be used for voice over broadband and are readily available from major electronic retailers, making consumer access simple and easy.

Sipura Technology and Grandstream, leaders in SIP-based access devices, have already implemented Nortel's MCS SIP specification into products that connect phones and other analog devices to VoIP networks. Sipura's SPA-2000 Analog Terminal Adaptor, which is in deployment with OneConnect, has received a Nortel certificate of compatibility for achieving interoperability with Nortel's voice over IP and multimedia communications solutions. Grandstream has also successfully tested its Handytone 486 Analog Terminal Adaptor with Nortel's MCS 5200.

AOL Canada, which recently announced deployment of its new AOL(R) TotalTalk(TM) VoIP service, is using Nortel SIP technology and the Grandstream Handytone 486.

"One of the key requirements for our new VoIP service was for it to be based on an open platform using industry standards," said Steve Koles, GM, AOL Enhanced Services for AOL Canada Inc. "It is important that we provide our members with an enhanced online experience and a wide variety of choices."

Arcturus Networks Inc., a leading provider of embedded Residential Gateway firmware, will offer Nortel-interoperable software combined with semiconductor reference designs for a wide range of VoIP enabled products. This initiative will make it easier for manufacturers to build SIP-based devices that interoperate with Nortel's VoIP and multimedia communications portfolio.

The expansion of the open client strategy program also includes wireless application pioneer TABLETmedia. TABLETmedia's iFon(TM) software application, which can transform a wireless LAN (WLAN)-capable PDA or smartphone into a powerful converged voice, video conferencing and messaging tool, will also be compatible with Nortel specifications.

Nortel is also working with SIPquest, a leading developer of SIP-based IP Telephony software applications and technology, to enable service providers to deliver advanced SIP-based multimedia services to residential and corporate customers over wireless handheld devices.

In addition, Nortel is announcing availability of a new tool to accelerate multimedia services deployment to personal computers. The Nortel Theme Developer Kit (TDK) provides an easy way for service providers to customize the Nortel multimedia PC client interface. TDK has been licensed and is being used by multiple services providers to deploy exciting new voice and video messaging services to customers.

Vendors wanting to participate in Nortel's industry-wide SIP initiative can request access to and licensing of the MCS documentation suite by completing an application available on the Nortel Developer Program Web site.

Nortel ranked #1 in the global markets for both service provider softswitches and gateway ports for the third quarter of 2004, according to Synergy Research Group, In-Stat/MDR and the Dell'Oro Group. Nortel is a worldwide leader in delivering SIP innovation with customers and allies 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's 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 will be demonstrating its Carrier VoIP and Multimedia Service solutions at the VON (Voice on the Net) 2005 Conference & Expo at the San Jose (Calif.) Convention Center (booth #809) March 7-10.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

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 regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal controls over financial reporting; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including breach of its support facility and public debt obligations and Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission ("SEC"); ongoing SEC reviews, which may result in changes to our public filings; the potential delisting or suspension of Nortel's and NNL's publicly traded securities; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's 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's customers; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's 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's 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, which is currently not available, of Nortel's forward purchase contracts; the impact of Nortel's 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; and the future success of Nortel's strategic alliances.

For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel with the SEC. Unless otherwise required by applicable securities laws, Nortel 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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