Sky Link and Nortel: UralWestcom, Apex, SSCC Select Nortel for Wireless Broadband Networks; CDMA450 Networks Expected to Enable New Mobile Voice, Data Services in Russia.

MOSCOW -- Sky Link and Nortel (NYSE:NT)(TSX:NT) announced today that, under three separate agreements, Nortel has been selected by Russian wireless operators CJSC UralWestcom (UWC), OJSC Apex (Apex) and CJSC Saratov System Cellular Communications (SSCC) as the supplier of wireless broadband network equipment. In the case of the UWC project only, the agreement for project implementation has been entered into with OJSC RTK-Leasing, a well-established Russian leasing company that will be leasing the network to UWC.

The agreements will extend advanced wireless services to the estimated 12 million people in the Ural and Volga regions of Russia.

UWC and Apex are subsidiaries of the holding company, Russian Telecommunications Development Corporation (RTDC). SSCC is jointly owned by RTDC and ZAO Sky Link (Sky Link). Sky Link is a joint venture of RTDC and AFK Sistema.

Construction of the networks is expected to commence in the first quarter of 2005 and to position UWC, Apex and SSCC to streamline networking functions, enabling reduced operating costs and increased network capacity for voice calls and data traffic. The operators will be able to offer advanced data services -- such as Internet access, e-mail, Virtual Private Networking (VPN), multimedia messaging and personal messaging -- aimed at generating new revenue streams.

Nortel will deploy a complete CDMA2000 1X solution, including core and radio access networks in the 450 MHz band and referred to as CDMA450, in Yekaterinburg and the cities of Sverlovskaya oblast, Chelyabinsk and Saratov. Deployments have already begun in Yekaterinburg, and are planned to cover Sverdlovskaya oblast, Chelyabinsk and Saratov by the beginning of 2005. Commencement of the SSCC project is subject to completion by SSCC of certain documentary formalities.

CDMA450 is ideal for providing affordable services in sparsely populated regions. CDMA450 uses a lower frequency radio spectrum than other new generation solutions, allowing cost-effective coverage of remote and rural areas with fewer radio masts, or base stations.

CDMA450 is an established industry standard that has been approved by the Russian government for use by operators of Nordic Mobile Telephone (NMT)-450 analogue networks seeking to migrate to third generation CDMA technology.

"This contract award is a critical part of our strategy to offer advanced wireless data services and helps us to build on our position as one of Russia's leading new generation mobile operators," said Raisa Rozinova, general manager, Sky Link.

"Nortel's CDMA450 solution provides a highly economical way to deliver a new era of mobile broadband wireless services across Russia," said Stan Cramton, president and chief executive officer, RTDC.

"CDMA450 continues to gain momentum across Russia and Eastern Europe as operators migrate to faster, more advanced mobile technologies," said Igor Marchenko, chief operating officer, Nortel Russia. "Increasingly, these operators are turning to Nortel to deliver reliable and secure networks that enhance the human experience through communications."

"As one of the industry's leading suppliers of a complete range of advanced wireless access and carrier-grade, core IP (Internet Protocol) technologies, Nortel is in a unique position to bring the most cost-effective solutions to market and position operators like UWC, Apex and SSCC to enable a rapid return-on-investment," Marchenko said.

CDMA450 can offer double the geographical coverage for the same number of base stations as that provided by 800 MHz CDMA technology. This can enable significantly reduced capital outlays by allowing operators to reduce the number and increase the size of individual cell sites needed to provide wireless coverage.

Nortel has more than eight years experience in deploying CDMA networks for many of the world's leading wireless operators. Nortel's CDMA450 solution leverages the company's commercial CDMA expertise and a product portfolio designed to use dedicated stand-alone radios, which can significantly reduce installation and operating costs.

Wireless infrastructure equipment being used for these networks includes Nortel CDMA Metro Cell radio base stations, CDMA Base Station Controllers, CDMA DMS-MTX switch and Packet Data Serving Node products.

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 UralWestcom (UWC)

Established in 1994 by USWest and UralTelecom and "EMTC," CJSC UWC has pioneered cellular communications services in the Sverdlovsk Region. The UWC NMT-450 analogue network has been operational since December 1995. Today, the UWC cellular communications services cover the territory where around 70 percent of the population of the Sverdlovsk Region lives. RTDC, an investment management company, is currently the only shareholder of UWC.

UWC is the only holder of an IMT-MC-450 of the CDMA2000 standard for the 450 MHz frequency spectrum license for the Sverdlovsk territory.

In December 2002, UWC announced its plans to deploy a new generation network in the Sverdlovsk Region. In the autumn of 2003, UWC together with Nortel carried out a certification trial of the CDMA2000 equipment in Yekaterinburg.

About Apex

Apex, an open joint stock company based in the Cheliabinsk region, was founded in 1993. It started providing NMT-450 mobile phone services in 1998. Since mid-2003, the operator is 95.34-percent owned by RTDC. In late 2003, Apex obtained a license to provide IMT-MC-450 cellular services as part of the Sky Link project.

About SSCC

SSCC is the first cellular operator in the Saratov Region. The company has been building its presence as an NMT-450 service provider in the local telecoms market for 10 years now.

SSCC provides guaranteed cellular communications services in 25 locations of the Saratov Region. The operator's network covers 70 percent of the territory of the Saratov Region where 84 percent of the population lives, as well as all major transport thoroughfares there.

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. CDMA2000 is a trademark of the Telecommunications Industry Association (TIA-USA).