Nortel Secure Routers Optimize Enterprise Networks to Lower Cost, Increase Quality of Communications

New Customers Benefit from Enhanced IP Telephony, Multimedia Performance

SEPTEMBER 19, 2006 - TORONTO - Nortel* [NYSE/TSX: NT] announced new customer wins for its Secure Router portfolio. Hanson Professional Services, Inc.** (Illinois), Austin Cancer Centers** (Texas) and Superior Community Credit Union** (Wisconsin) are using Nortel’s Secure Routers as a low-cost, high performance solution for secure end- to-end converged communications.

Nortel Secure Routers deliver the low-latency and high packet throughput required for IP telephony and multimedia applications. With up to four times the performance throughput of equivalent routers from the leading competitor, Nortel’s Secure Router portfolio allows for better utilization of wide area network (WAN) bandwidth, at 25 percent less cost.

Hanson Professional Services is using Secure Routers to provide high-speed Internet connectivity and site-to-site virtual private network (VPN) communications so that large architectural drawings can be easily shared and archived between its 14 remote sites.

“Everything Nortel told me and showed me these routers could do, they’ve done. I’m really impressed with how easy they are to set up and use,” said Robert Stidham, manager, Information Technology, Hanson Professional Services. “On top of that, I have also protected my network investment by deploying routers that can support IP telephony, as well as deliver the quality of service (QoS) I need - all at 50 percent less cost than the competitor’s gear.”

Austin Cancer Centers is using Nortel Secure Routers to support critical access to its radiation treatment planning systems, CT scanner, medical dictation system and IMPAC patient scheduler. The superior bandwidth and increased resiliency enabled by Nortel’s Secure Routers allows Austin Cancer Centers to transport large medical images, many volumes of patient information and IP telephony traffic across its four site network.

“Our business communications are mission critical in every sense of the word. Every weekday we have more than 100 patients scheduled for radiation therapy every 15 - 30 minutes in our three clinics,” said Ean Rankin, CEO, Austin Cancer Centers. “Nortel’s Secure Routers allow us to focus resources on treating patients and saving lives instead of managing our voice and data communications.”

Superior Community Credit Union, which has nearly 23,000 members and multiple branch offices, worked with Nortel channel partner CenturyTel and selected Nortel’s Secure Routers for increased performance, reliability and investment protection.

“Our business runs 24 hours per day, seven days per week-failures are not an option. If a customer goes to our on-line banking website at 3:00 in the morning the service needs to be there,” said Blaine Ballavance, vice president of operations, Superior Community Credit Union “Nortel is known for its product reliability, and the Secure Routers take reliability one step further by incorporating security features and tools that help protect our network against potential threats.”

The Nortel Secure Router 1000 portfolio is comprised of the 1001, 1002 and 1004 for small office and branch office deployments. It also includes the Secure Router 3120 for mid-range branch deployments. To date, more than 15,000 Nortel Secure Routers have been deployed worldwide, many of them being used by large service providers and Fortune 1000 customers.

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. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today’s barriers to efficiency, speed and performance by simplifying networks and connecting people with information. 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 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 finalization and approval of its proposed class action settlement, or if such proposed class action settlement is not finalized, any larger settlements or awards of damages in respect of such class actions; 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 objectives; 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 credit 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 credit facilities; 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 any future 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 Report 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.

*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

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