SaskTel Signs Contract with Nortel Networks for Multimedia Communications Portfolio.

Business Editors/High-Tech Writers

REGINA, Saskatchewan--(BUSINESS WIRE)--May 21, 2003

Plans to Be First Service Provider Worldwide to Deploy Advanced

Multimedia, Packet Voice Services Using Nortel Networks Equipment

SaskTel, an innovative communications solutions provider in Canada, has signed an agreement with Nortel Networks (NYSE:NT)(TSX:NT) -- estimated at approximately US$5 million -- for supply of Nortel Networks Multimedia Communications Portfolio and Succession voice over Internet Protocol (VoIP) equipment.

SaskTel plans to be the first service provider worldwide to offer new revenue-generating multimedia and packet voice services using Nortel Networks equipment.

As part of this agreement, SaskTel is in the process of deploying products from Nortel Networks Multimedia Communications Portfolio, which revolutionizes the way people communicate by unifying communications across multiple media and devices -- e-mail, cell phones, home and work telephones, PDAs (personal digital assistant), instant messaging, file sharing and video conferencing -- to provide a single, simple communications session.

"We believe that Nortel Networks Multimedia Communications Portfolio will help provide for the cost-effective delivery of SaskTel's Hosted Multimedia Services, which include Voice over IP and integrated multimedia service capabilities," said Kym Wittal, chief technology officer, SaskTel. "Investing in technology and providing next generation products and services to our customers has always been our number one priority."

"Nortel Networks has created a comprehensive program designed specifically to help service providers drive new revenue opportunities, and to facilitate mass market deployment of new, hosted multimedia and packet voice services based on Session Initiation Protocol (SIP)," said Sue Spradley, president, Wireline Networks, Nortel Networks. "As an industry innovator, SaskTel is a lead customer for this initiative. Nortel Networks Multimedia Communications Portfolio will help revolutionize the way people communicate, increasing user mobility, collaboration and productivity."

SIP is an industry standard 'signaling' protocol that is used to establish multimedia 'sessions' over an IP network. Signaling is used to set up two-way telephone calls and collaborative multimedia sessions, and will be as important for next generation services as it is for today's telephone services.

After completion of an extensive lab trial, SaskTel is now deploying Nortel Networks Interactive Multimedia Server from Nortel Networks Multimedia Communications Portfolio to deliver new SIP-based multimedia capabilities that can be personalized to meet subscribers' individual communications requirements. SaskTel plans to use this technology to provide innovative VoIP and multimedia solutions for both residential and business customers.

Nortel Networks is also working with SaskTel to help the company fully leverage its existing investment in Nortel Networks DMS circuit switches. SaskTel is evolving its circuit switched network to the Succession Communication Server 2000 platform to drive operational cost reductions and further service enablement of packetization. In addition, SaskTel will deploy Nortel Networks Passport Packet Voice Gateways (PVGs) to expand its network reach and Nortel Networks Universal Signaling Point to interface between classic SS7 signaling and next generation IP and ATM packet networks.

Nortel Networks Multimedia Communications Portfolio includes Nortel Networks Multimedia Exchange and IMS, which deliver advanced multimedia and collaborative applications through commercially available hardware and the same open-standards software. This portfolio delivers the scale and functionality necessary for enterprises and service providers to address their respective target market segments. These solutions transform the way users communicate, allowing them to take advantage of next generation tools that improve productivity and facilitate instantaneous decision-making. Multimedia Communications Portfolio delivers multimedia (video calling, picture caller ID); collaboration (conferencing, white boarding, file exchange, co-Web browsing); personalization (call screening, call logs, call management and routing); presence, and instant messaging services.

SaskTel is the leading full service communications company in Saskatchewan, offering complete wireline, wireless, internet and e-business solutions over a state-of-the-art, digital network. SaskTel maintains investments in companies that provide a variety of products and services. Visit SaskTel at www.sasktel.com.

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.

Nortel Networks, the Nortel Networks logo, the Globemark, Succession, DMS and Passport and are trademarks of Nortel Networks.