Nortel Unveils New Vision To Transform Enterprise Communications

ORLANDO, FLORIDA -- At VoiceCon Spring 2007 this week, Nortel(1) (TSX: NT)(NYSE: NT) is outlining its vision for unified communications (UC) and unveiling new solutions designed to provide enterprises with simple and reliable ways to deliver voice, video and data over IP and enable advanced unified communications.

Nortel President and CEO Mike Zafirovski will be a keynote speaker on Tuesday, and will discuss how unified communications solutions and converged applications are poised to transform enterprise communications.

“Unified communications fundamentally changes the way enterprises communicate, simplifying the deluge of communications with a single, seamless interface,” said Zafirovski. “Nortel and our partners are working to create a UC experience that makes workers more productive and responsive, with a rich communications experience in the office or on the go.”

Nortel’s unified communications vision focuses on providing solutions that align to the business environment the enterprise uses today. These solutions allow users to experience streamlined communications within their business application while leveraging their existing IT investments - truly UC your way.

As part of its expanding unified communications portfolio, Nortel is introducing several new solutions that deliver a richer set of UC tools while ensuring the resiliency of the communications network.

Nortel’s cornerstone IP Telephony solution, the Communication Server (CS) 1000 will deliver new capabilities and enhancements to further strengthen this leading VoIP platform. A new release of CS 1000 will provide improved reliability and redundancy, enhanced network and voice call security and new E911 capabilities, all aimed at ensuring businesses can rely on their network for critical communications needs. Through planned interoperability with Microsoft Office Communications Server 2007, this new release will deliver unified communications capabilities as part of the Innovative Communications Alliance roadmap.

The new CS 1000 architecture will extend its support for open standards, with support for an open operating system and delivery on commercial off-the-shelf (COTS) hardware from IBM and other suppliers, to improve deployment flexibility and manageability of the network. Significant simplification of the portfolio elements and pricing bundles will make it easier for partners and resellers to quote and sell. This new release is planned for availability in 2Q07.

Additionally today Nortel announced the general availability of a new release of the award-winning Multimedia Communication Server (MCS) 5100. This new release improves productivity by providing users with tight integration of telephony and multimedia applications within IBM Lotus Notes. It also features a number of significant enhancements, including improved and simplified collaboration capabilities that enable a full range of voice, video, conferencing, email, IM and presence capabilities at the click of a mouse, along with enhanced mobility capabilities that provide a rich communications experience for mobile workers. The new MCS 5100 release also introduces support for new SIP-based IP phones improving usability and flexibility and improves the overall security, reliability, manageability and scalability of the core platform, which now operates on IBM servers with a Linux operating system.

Nortel is also introducing Unified Messaging (UM) 2000, a feature-rich, carrier-grade solution supporting up to one million users that enables voicemail, fax and email to be accessed together through common email applications and integrates with Active Directory. UM 2000 is standards-based so that it can operate in a multivendor voice network, and is targeted to global enterprises as well as carriers that offer their customers unified messaging solutions.

To help enterprises deploy UC-optimized networks, Nortel is also unveiling converged data networking enhancements to its North American marketing campaigns, which build on the successful IPT 1-2-3 campaign launched last year. These campaign enhancements include partner tools, focused demand generation activities, pre-engineered data packages, and optional services that make it easier and more cost- effective for authorized channel partners to deploy a LAN that supports customers’ VoIP and UC needs.

These data packages and services can be quoted starting in April 2007 and include options to enable the full deployment of Power over Ethernet, VoIP-Optimized Secure Routing for WAN access, and WLAN for mobility and optional maintenance, installation and technical support services. Nortel’s North American campaign also includes promotion and incentive programs available today through authorized Nortel channel partners for enterprises who are customizing their network for unified communications.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel’s technologies are designed to help eliminate today’s barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain statements in this press release may contain words such as “could”, “expects”, “may”, “anticipates”, “believes”, “intends”, “estimates”, “targets”, “envisions”, “seeks” and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Nortel’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different. Further, actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following

(i) risks and uncertainties relating to Nortel’s restatements and related matters including: Nortel’s most recent restatement and two previous restatements of its financial statements and related events; the negative impact on Nortel and NNL of their most recent restatement and delay in filing their financial statements and related periodic reports; legal judgments, fines, penalties or settlements, or any substantial regulatory fines or other penalties or sanctions, related to the ongoing regulatory and criminal investigations of Nortel in the U.S. and Canada; any significant pending civil litigation actions not encompassed by Nortel’s proposed class action settlement; any substantial cash payment and/or significant dilution of Nortel’s existing equity positions resulting from the approval of its proposed class action settlement; any unsuccessful remediation of Nortel’s material weaknesses in internal control over financial reporting resulting in an inability to report Nortel’s results of operations and financial condition accurately and in a timely manner; the time required to implement Nortel’s remedial measures; Nortel’s inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC), and Nortel’s below investment grade credit rating and any further adverse effect on its credit rating due to Nortel’s restatements of its financial statements; any adverse affect on Nortel’s business and market price of its publicly traded securities arising from continuing negative publicity related to Nortel’s restatements; Nortel’s potential inability to attract or retain the personnel necessary to achieve its business objectives; any breach by Nortel of the continued listing requirements of the NYSE or TSX causing the NYSE and/or the TSX to commence suspension or delisting procedures;

(ii) risks and uncertainties relating to Nortel’s business including: yearly and quarterly fluctuations of Nortel’s operating results; reduced demand and pricing pressures for its products due to global economic conditions, significant competition, competitive pricing practice, cautious capital spending by customers, increased industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles, and other trends and industry characteristics affecting the telecommunications industry; the sufficiency of recently announced restructuring actions, including the potential for higher actual costs to be incurred in connection with these restructuring actions compared to the estimated costs of such actions and the ability to achieve the targeted cost savings and reductions of Nortel’s unfunded pension liability deficit; any material and adverse affects on Nortel’s performance if its expectations regarding market demand for particular products prove to be wrong or because of certain barriers in its efforts to expand internationally; any reduction in Nortel’s operating results and any related volatility in the market price of its publicly traded securities arising from any decline in its gross margin, or fluctuations in foreign currency exchange rates; any negative developments associated with Nortel’s supply contract and contract manufacturing agreements including as a result of using a sole supplier for key optical networking solutions components, and any defects or errors in Nortel’s current or planned products; any negative impact to Nortel of its failure to achieve its business transformation objective; additional valuation allowances for all or a portion of its deferred tax assets; Nortel’s failure to protect its intellectual property rights, or any adverse judgments or settlements arising out of disputes regarding intellectual property; changes in regulation of the Internet and/or other aspects of the industry; Nortel’s failure to successfully operate or integrate its strategic acquisitions, or failure to consummate or succeed with its strategic alliances; any negative effect of Nortel’s failure to evolve adequately its financial and managerial control and reporting systems and processes, manage and grow its business, or create an effective risk management strategy; and

(iii) risks and uncertainties relating to Nortel’s liquidity, financing arrangements and capital including: the impact of Nortel’s most recent restatement and two previous restatements of its financial statements; any inability of Nortel to manage cash flow fluctuations to fund working capital requirements or achieve its business objectives in a timely manner or obtain additional sources of funding; high levels of debt, limitations on Nortel capitalizing on business opportunities because of support facility covenants, or on obtaining additional secured debt pursuant to the provisions of indentures governing certain of Nortel’s public debt issues and the provisions of its support facility; any increase of restricted cash requirements for Nortel if it is unable to secure alternative support for obligations arising from certain normal course business activities, or any inability of Nortel’s subsidiaries to provide it with sufficient funding; any negative effect to Nortel of the need to make larger defined benefit plans contributions in the future or exposure to customer credit risks or inability of customers to fulfill payment obligations under customer financing arrangements; any negative impact on Nortel’s ability to make future acquisitions, raise capital, issue debt and retain employees arising from stock price volatility and further declines in the market price of Nortel’s publicly traded securities, or the share consolidation resulting in a lower total market capitalization or adverse effect on the liquidity of Nortel’s common shares. For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form10-K/A, Quarterly Reports on Form 10-Q and other securities filings 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.

(1)Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.