Nortel Completes World’s First LTE TDD 4G Wireless Demonstration in China

Interoperability Milestone Accelerates Evolution to Next Generation Services

BEIJING, China - Nortel* [TSX: NT, OTC: NRTLQ] has successfully completed the first end-to-end video streaming session using a Time Division Duplex (TDD)-based Long Term Evolution (LTE) network, working with commercial grade LTE Base Station and device prototypes in China. This is an important milestone in the development of next generation wireless services for TD-SCDMA mobile network deployments in China, as well as advancing the deployment of LTE for service providers using TDD spectrum.

Demonstrating the power of 4G to deliver bandwidth-intensive applications to mobile users, engineers in Nortel’s China R&D Center of Excellence completed the streaming video session using Nortel’s LTE eNodeB (Base Station) with a prototype device for LTE TDD. Nortel has clearly demonstrated its ability to advance high-speed mobile Internet with LTE as the next step in evolving the TD-SCDMA based networks in China that use TDD spectrum.

China’s government confirmed earlier this year the award of 3G licenses to the three major telecom operators in the country. China Mobile will operate a network based on the TD-SCDMA standard, China Telecom will operate a CDMA2000-based network, and China Unicom will operate the country’s W-CDMA network. China Mobile, making the announcement of this collaboration and successful test call a vital step towards delivering true mobile broadband service to China’s increasingly hyperconnected population. LTE TDD is a standard that will be used to evolve China Mobile’s TD-SCDMA network. Nortel is also driving LTE trials with GSM, CDMA and WCDMA/HSPA operators around the world with a Frequency Division Duplex (FDD)-based LTE solution to evolve current 2G/3G networks to LTE.

“Nortel has a history of innovation in the wireless space spanning the last three decades, and this milestone is another example of how our engineers are accelerating the delivery of tomorrow’s technology,” said Richard Lowe, president, Carrier Networks, Nortel. “As operators globally are looking at their next generation technology choices, Nortel is able to help operators migrate to LTE from all major wireless standards. This milestone brings true mobile broadband closer for the hundreds of millions of mobile users in China who want ubiquitous high-speed Internet.”

Nortel has now successfully demonstrated LTE solution capability across both FDD and TDD as defined in the 3GPP Release 8 standard. Nortel’s LTE eNB is capable of supporting both FDD and TDD deployments with software defined radios providing industry leading performance and gracefully integrating with existing 2G/3G Networks.

The demos, completed on January 23, 2009, were undertaken by engineers at Nortel’s joint venture GDNT (Guangdong Nortel Telecommunications Ltd) R&D facility in Guangzhou, in southern China. The GDNT facility and Nortel’s R&D center in Beijing together make up Nortel’s China Labs, one of two full service R&D facilities the company maintains globally.

Visitors to Mobile World Congress can experience the LTE TDD demonstration in Nortel’s Booth located in Hall 8.

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 from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form10-K, 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.

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