VIVO Selects Nortel Networks to Expand, Upgrade 3G CDMA 2000 1X Network in Brazil's Northern, Southern, West-Central Regions.

SAO PAULO, Brazil -- Wireless Infrastructure Technology Expected to Help Drive Reduced Costs, Greater Network Efficiencies

VIVO, the leading mobile telecommunications service provider in the Southern Hemisphere, has selected Nortel Networks (NYSE:NT)(TSX:NT) to expand and upgrade its third generation (3G) CDMA (code division multiple access) 2000 1X network in Brazil's Northern, Southern and West-Central regions and the states of Bahia and Maranhao in the Northeast.

Under the terms of a contract announced today Nortel Networks will supply the equipment to expand and upgrade VIVO's core and access networks in the state of Rio Grande do Sul and in the Northern region, which includes more than 70 municipalities, among them: Manaus, Belem, Maraba, Santarem and Macapa. For the West-Central region, Nortel Networks will supply switches to help expand capacity in the cities of Brasilia and Goiania. In Bahia, Nortel Networks will expand trunking peripherals and supply core and access equipment.

"Expanding the 3G wireless network will enable VIVO to improve its capability and offer new services for our customers in these regions like high-speed wireless Internet and intranet access, e-mails with attached files, image and video downloading, video streaming and location-based services," said Javier Rodriguez, vice president, Technology and Networks, VIVO.

"This expansion project strengthens our relationship with VIVO and reinforces such key benefits of Nortel Networks technology as investment protection and cost effectiveness," said Rodrigo Abreu, managing director, Brazil, Nortel Networks.

Nortel Networks solutions for VIVO will include a switching platform that offers smooth evolution to an all-IP (Internet Protocol) multiservice packet network architecture; radio base stations; and base station controllers. Nortel Networks Compact Metro Cell, a highly flexible, scaleable and power-efficient 3G base station, will be deployed for the first time in Brazil, enabling more than a 50 percent reduction in space required at VIVO sites and helping to drive energy savings.

Nortel Networks CDMA technology was developed to maximize existing customer investments while driving reduced capital and operating costs. As a CDMA leader since 1995, Nortel Networks has designed and deployed CDMA networks in a variety of terrains and demographics for more than 65 carriers in 17 countries. Nortel Networks CDMA technology supports multiple frequencies, including 450, 800, 1900 and 2100MHz.

Nortel Networks has designed, deployed and launched more than 300 wireless networks in more than 50 countries around the world. Nortel Networks was the first industry supplier to have 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 supplier of all new-generation wireless solutions.

About VIVO

VIVO, a joint venture between Telefonica Moviles and Portugal Telecom, is the largest mobile service operator in the Southern Hemisphere, and is ranked the 10th largest in the world with more than 23.5 million subscribers. VIVO is the leading service provider in the individual segment and corporate markets to which it offers solutions through VIVO Empresas business unit.

VIVO has as a competitive edge, CDMA -- which is the foundation for third generation wireless networks globally, according to the International Telecommunications Union (ITU) -- in addition to the footprint, the modernity and the innovative nature of its voice and data services like wireless broadband Internet access, video streaming and other forms of online communication.

About Nortel Networks

Nortel Networks has been in Brazil for 13 years with headquarters in Sao Paulo and regional offices. The Excellence Center in Campinas shelters the Research & Development Center, Training Center, Wireless Internet Next Generation (WING) Center and the plant where Wireless, Voice and Data, Enterprise and Optical equipment is manufactured.

As a global innovation leader, Nortel Networks enriches consumer and business communications worldwide by offering converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks 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 or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 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 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 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 controls; 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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