Nortel to Sponsor "One Laptop per Child" Initiative

Sponsorship Helps Bring Technology to Educate Children in Emerging Markets.

DECEMBER 14, 2005, SUNRISE, Florida - Nortel* [NYSE/TSX: NT] announced that it has become a corporate member of the “One Laptop per Child” (OLPC) initiative. OLPC, a non-profit organization, was formed earlier this year by Nicholas Negroponte and other faculty members from the MIT Media Lab. Nortel has paid a fee to obtain a corporate membership in OLPC which is renewable on an annual basis.

By joining OLPC, Nortel, an existing sponsor of the Media Lab through its University Interaction Program, extends its long-standing relationship with the Lab.

The objective of OLPC is to develop a fully functioning, connected laptop to give the largest number of the world’s children - especially those in developing nations - an innovative learning tool for independent interaction, revolutionizing information delivery to schoolchildren globally.

According to OLPC, the laptop, currently in the early stages of development, is designed to be the size of a standard school notebook and will use wireless networking capabilities to allow children to interact with each other and access the Internet and community resources. It is expected to leverage built-in wireless capabilities that support WiFi and voice over Internet Protocol (VoIP) and be used as a conventional computer, electronic book, handheld game console and even function as a TV.

According to OLPC, currently government agencies in Argentina, Nigeria, Brazil, Thailand, China, Egypt and India are in preliminary discussions with OLPC to distribute the $100 laptops through pilot programs in each of these countries.

“The goal of OLPC is to actively engage children in their own education. The $100 laptop will belong to each child and be part his or her life, in and out of school, for study and for play. By providing Internet access and tools to think with, a child has the opportunity to learn about learning itself. By virtue of all children in a school having their own laptops, a connected community emerges,” says Negroponte, who serves as chairman of OLPC.

Involvement with OLPC reinforces Nortel’s “Connecting Community” initiative to help improve education, health care and trade in developing markets. Nortel seeks to help develop communities that have little or no existing communications infrastructure and capabilities, and is committed to digital and social inclusion in emerging markets.

“Nortel has a firm belief in the power of communications technology to enhance the lives of people around the world. Our sponsorship of initiatives such as the OLPC can help address some of the greatest challenges in emerging markets,” said Martha Bejar, president, Caribbean and Latin America and Emerging Markets Solutions, Nortel. “We believe that wireless broadband technology will be the bridge to connect communities that are today disconnected. These technologies are already being leveraged to address the digital divide that exists between developed and developing markets.”

Over one billion people globally are still without access to basic telecom services and 800,000 communities have no connection to global voice or data networks, according to statistics from the International Telecommunications Union (ITU). (Source: ITU, May 2004 and June 2005).

About OLPC

One Laptop per Child (OLPC) is a Delaware-based, non-profit organization created by faculty members from the MIT Media Lab to design, manufacture, and distribute laptops that are sufficiently inexpensive to provide every child in the world access to knowledge and modern forms of education. The laptops will be sold to governments and issued to children by schools on a basis of one laptop per child. These machines will be rugged, Linux-based, and so energy efficient that hand-cranking alone can generate sufficient power for operation. Mesh networking will give many machines Internet access from one connection. The pricing goal is to start near $100 and then steadily decrease.

OLPC is based on “constructionist” theories of learning pioneered by Seymour Papert and later Alan Kay, as well as the principles expressed in Nicholas Negroponte’s book, Being Digital. The corporate members are Advanced Micro Devices (AMD), Brightstar, Google, News Corporation, Nortel, and Red Hat.

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.

Use of the terms “partner” and “partnership” does not imply a legal partnership between Nortel and any other party.

Contact Information

Jamie Moody

Nortel

Contact via E-mail