Nortel to Build First WiMAX Network in Canada with Alberta Special Areas Board

WiMAX Network to Equip Rural Areas with High-Speed Wireless Broadband Access and Increase Economic Activity

DECEMBER 07, 2005, DALLAS - The Alberta Special Areas Board (SAB) has selected Nortel* [NYSE/TSX: NT] to build what is believed to be the first commercial broadband wireless access network in Canada based on the WiMAX IEEE 802.16-2004 (fixed WiMAX) standard.

The SAB is collaborating with NETAGO Wireless, a newly formed wireless service provider in Canada, to bring wireless broadband services to rural Albertans spread throughout more than 8,000 square miles (21,000 square kms) in southeastern Alberta. The WiMAX network will operate in the 3.5GHz spectrum band and be made available to roughly 80 percent of SAB residents by the end of summer 2006.

The new WiMAX network will also extend the service area of the Alberta SuperNet Project (http://www.albertasupernet.ca**), a provincial government initiative designed to bring affordable broadband services to approximately 4,200 government, health, library and educational facilities in 429 communities across Alberta.

“This WiMAX network will support our goal of bridging the digital divide through affordable broadband wireless Internet services to users located in rural areas of Alberta,” said Jay J. Slemp, chairman, SAB. “Nortel’s proven innovation and leadership in WiMAX, wireless mesh and advanced 3G technologies along with its ability to get this service up and running efficiently is essential to meeting our goal.”

Under the terms of the agreement with the SAB, Nortel will supply fixed (802.16d) WiMAX base stations, indoor and outdoor CPEs (Customer Premises Equipment) and wireless backhaul equipment, as well provide installation and professional services.

“We are pleased to have been selected by the SAB to build this innovative network in areas that lack basic broadband capabilities.” said Mark Whitton, vice president and general manager, WiMAX and Wireless Mesh Networks, Nortel. “Nortel’s Fixed WiMAX solutions will help pave the way for long-term economic growth and development by providing scalable, robust and cost-effective wireless broadband services to residential and business customers across rural Alberta.”

The WiMAX network will equip SAB residences and businesses with fixed broadband wireless access at data rates between 1-3 Mbps which is comparable to cable-broadband and DSL connections .The high-speed capabilities will support sophisticated broadband services such as email, high-speed Internet access, multimedia applications including streaming video and music, VoIP and other real-time business collaboration services. The network will also support video surveillance and remote telemetry.

Nortel’s fixed (802.16d) WiMAX solutions can be seamlessly upgraded to support the nomadic/portable WiMAX standard (802.16e). Nortel is a member of the WiMAX Forum and has contributed to the 802.16 standard by helping develop underlying technologies like OFDM and MIMO for more than six years, and holds several key patents in these areas.

Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries. Nortel’s leadership in wireless data networks coupled with its enterprise strategy of delivering seamless voice, data, multimedia and converged IP-enabled solutions will allow businesses and consumers to enjoy a seamless, mobile broadband experience.

About Netago Wireless

NETAGO Wireless is an ISP utilizing the power of the Alberta SuperNet and leading edge wireless technologies to deliver current and future IP based products and services to rural Albertans. Headquartered in Hanna, Alberta, NETAGO has a small staff with a long history in telecommunication voice and data networking. Our vision is to provide High Speed Internet, Voice, Data, and Video applications at higher levels of service and comparable costs to what is available in urban centers. We also remain committed to providing jobs and spurring economic development by bridging the digital gap between urban and rural areas. For more information, visit NETAGO on the Web at www.netago.ca.**

About Special Areas Board

The Special Areas Board is a unique rural municipal area covering approximately 5 million acres in southeastern Alberta. The Special Areas Board is responsible for the administration of the area as it relates to providing all municipal services as well as the leasing of public lands within the area. The Special Areas Board was set up for land use control in the 1930’s and still continues to operate the area for the betterment of the land and the people. For more information, visit Special Areas Board on the web at www.specialareas.ab.ca.**

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 regulatory and criminal investigations and civil litigation actions related to Nortel’s restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel’s results of operations, financial condition and liquidity, and any related potential dilution of Nortel’s common shares; the findings of Nortel’s independent review and implementation of recommended remedial measures; the outcome of the ongoing independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel’s previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel’s internal control over financial reporting and the conclusion of Nortel’s management and independent auditor that Nortel’s internal control over financial reporting is ineffective, which could continue to impact Nortel’s ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortel’s and NNL’s failure to timely file their financial statements and related periodic reports, including Nortel’s inability to access its shelf registration statement filed with the United States Securities and Exchange Commission (SEC); the impact of management changes, including the termination for cause of Nortel’s former CEO, CFO and Controller in April 2004; the sufficiency of Nortel’s restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004 and December 14, 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; increased consolidation among Nortel’s customers and the loss of customers in certain markets; fluctuations in Nortel’s operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel’s cash flow, level of outstanding debt and current debt ratings; Nortel’s monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortel’s ability to recruit and retain qualified employees; 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 flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; 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 and consolidation 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; general stock market volatility; negative developments associated with Nortel’s supply contracts and contract manufacturing agreements, including as a result of using a sole supplier for a key component of certain optical networks solutions; 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; any undetected product defects, errors or failures; the future success of Nortel’s strategic alliances; and certain restrictions on how Nortel and its president and chief executive officer conduct business. For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q 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.

**This is a 3rd party link as described in our Web linking practices.

Contact Information

Jamie Moody

Nortel

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