Nortel Wins 3G Wireless Infrastructure Renewal with Sprint; Agreement Includes CDMA2000 1X Network Expansion, 1xEV-DO Deployment.

DALLAS -- Nortel (NYSE:NT)(TSX:NT) today announced a contract renewal agreement with Sprint (NYSE:FON) estimated to be worth approximately US$1 billion over three years to deploy enhanced wireless infrastructure equipment and provide professional services to support the continued expansion of the Nortel portion of Sprint's nationwide third generation (3G) wireless network. The agreement also covers a potential broadband data upgrade to 1xEV-DO Release A or 1xEV-DV Release D technologies.

Under this new agreement, Nortel will provide CDMA2000 1X radio base stations, base station controllers, switching platforms and other related equipment across Sprint's existing Nortel footprint. Nortel will also supply Sprint with the new Nortel PDSN (Packet Data Service Node) 16000. Sprint plans to leverage this platform's industry-leading capacity and performance, combined with innovative features like advanced billing capabilities, to facilitate network capacity growth and expand its wireless packet data service offerings.

The agreement also calls for Nortel to provide CDMA2000 1xEV-DO equipment in several key markets across Sprint's nationwide network. Earlier this year, Sprint announced plans to design and deploy EV-DO, with initial service available in select markets in 2004 and general launch in the majority of top metropolitan markets in the United States in 2005.

"Sprint intends to remain the industry leader in wireless data by expanding our 1X network and deploying EV-DO technology to meet customer demand for faster wireless data speeds," said Oliver Valente, vice president, technology development, Sprint. "Nortel has been a key contributor in our efforts to improve network performance and quality while at the same time reducing operating costs and leveraging existing infrastructure investment."

EV-DO is a broadband radio technology that can support transmission speeds higher than those currently available using ADSL. With average speeds of 300-500 kilobits per second and peak rates up to 2.4 Megabits per second for downloads, EV-DO can provide mobile device data speeds up to 10 times faster than currently available on today's network. With EV-DO, Sprint's customers will also experience superior application and service performance on EV-DO-capable handsets and laptops equipped with EV-DO-enabled Sprint Connection Cards.

"This renewal agreement further demonstrates the strength of our relationship with Sprint and our commitment to support delivery of advanced mobile voice and data services," said Richard Lowe, president, CDMA Wireless Networks, Nortel. "Nortel CDMA equipment is designed to support EV-DO through simple upgrades to existing hardware, which means Sprint's migration from 1X to EV-DO will require no 'forklift upgrades.' This approach provides a cost effective and rapid method for enhancing the end user experience by delivering advanced wireless services and applications."

Nortel has designed, installed and launched more than 300 wireless networks in over 50 countries across the globe. Nortel was the industry's first supplier with wireless networks operating in all advanced radio technologies (GSM/GPRS/EDGE, CDMA2000 1X and 1xEV-DO, UMTS and WLAN), and is the only end-to-end provider of all next generation wireless solutions.

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 Nortel's independent review and planned restatement or revisions of its previously announced or filed financial results; the resolution of the accounting issues announced on November 11, 2004, including the outcome of discussions with the United States Securities and Exchange Commission (SEC); the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel's filing obligations on support facilities and public debt obligations; any potential delisting or suspension of the Company's or NNL's securities; the adverse resolution of litigation, investigations, intellectual property disputes and similar matters; 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; the communication by Nortel's auditors of the existence of material weaknesses in internal controls; Nortel's ability to recruit and retain qualified employees; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; 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 flows; 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 of Nortel's 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 Form 10-Q/A and Form 10-K/A 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.

Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks. Sprint is a registered trademark of Sprint Communications Company L.P.