Telstra Deploying Mobile Broadband Network Upgrades Using 3G Solution from Nortel Networks.

MELBOURNE, Australia -- High-Speed 1xEV-DO Technology Set to Enable New Era of Data Services for Australia

Telstra, Australia's largest telecommunications and information services company, plans to boost network capacity and enable high-speed data services in capital cities and selected regional areas across Australia using CDMA2000 1xEV-DO (evolution-data optimized) third generation (3G) mobile broadband equipment from Nortel Networks (NYSE:NT)(TSX:NT).

Upgrading to 1xEV-DO technology will enable Telstra to offer greatly enhanced levels of performance for mobile data services like Web browsing and remote mobile access to applications, providing Telstra customers with an 'anywhere' office experience.

Building on an existing CDMA network supplied by Nortel Networks to Telstra in 2000 and a subsequent CDMA2000 1X upgrade in 2002, Nortel Networks has begun deploying CDMA2000 1xEV-DO in major capital cities and selected regional areas.

1xEV-DO is a broadband radio technology that can support transmission speeds higher than those currently available using ADSL and cable modems. Combined with Telstra's national CDMA 1xRTT network, it will power Australia's largest cellular data network. This network will provide speeds bursting up to 153 kilobits per second (Kbps) nationally and bursting in excess of 1 megabit per second (Mbps) in 1xEV-DO coverage areas. 1xEV-DO users can expect 300 to 600 Kbps average throughput - equivalent to and in some cases better than fixed broadband.

Nortel Networks CDMA equipment is designed to support 1xEV-DO through modular upgrades to existing hardware. This approach provides a cost effective and rapid method for bringing to market advanced wireless services and associated revenues.

"With CDMA2000 1xEV-DO, Telstra will be in a position to offer Australian businesses mobile broadband, which has the capacity to provide the fastest 3G data experience of any of Australia's cellular networks," said Steve Wood, president, Australia and New Zealand, Nortel Networks. "1xEV-DO is gaining momentum around the world as a tool to help service providers drive new revenue opportunities. Nortel Networks continues to innovate and enhance its CDMA portfolio to support our customers' 3G migration strategies."

Nortel Networks CDMA technology is designed to maximize existing customer investments and help service providers drive down capital and operating costs. A leader in CDMA since 1995, Nortel Networks has designed and deployed CDMA networks over varying terrain and population densities for more than 65 operators in 17 countries. Nortel Networks CDMA technology supports multiple frequencies, including 450, 800, 1900 and 2100 MHz. Nortel Networks is the only vendor capable of supporting multiple frequencies in one base station frame simultaneously.

In addition to Telstra, Nortel Networks is deploying 1xEV-DO networks with leading customers around the world, including Verizon Wireless in the United States, Vesper in Brazil, Asia Pacific Broadband Wireless in Taiwan, and Eurotel in Central Europe.

Nortel Networks has designed, installed and launched more than 300 wireless networks in over 50 countries across the globe. Nortel Networks 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.

Telstra is Australia's largest telecommunications carrier and a world-class fully integrated, full service provider across wireline, ADSL, HFC, satellite and digital wireless networks and platforms. Telstra has more than 10 million household, business and wholesale customers. Telstra's BigPond(TM) is Australia's leading ISP. Telstra has the most highly accessed family of internet portals and sites and provides entertainment and multimedia content over its broadband network and through its Pay-TV joint venture, FOXTEL.

Telstra owns and operates one of the most technologically advanced networks, offering end-to-end solutions ranging from broadband, IP, mobile and intelligent network services, to voice and data network hubs, call centres, and advanced multimedia and e-commerce applications. It has business operations in the Asia-Pacific region, North America, the UK and Europe.

Telstra is Australia's largest telecommunications and information services company, with one of the best known brands in the country. Telstra offers a full range of services and competes in all telecommunications markets throughout Australia, providing more than 10.3 million Australian fixed line and more than 6.5 million mobile services. More information on Telstra is available at www.telstra.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 or www.nortelnetworks.com/media_center.

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 Networks independent review and planned restatement of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks 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; continued reductions in spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks 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 Networks 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 Networks purchase contracts; the impact of Nortel Networks 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; the future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters.

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 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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