Nortel Achieves First Simultaneous High-Speed Uplink, Downlink Mobile Calls

Power of Combined HSUPA and HSDPA to be Demonstrated at 3GSM World Congress

FEBRUARY 07, 2006, PARIS - Nortel* [NYSE/TSX: NT] has successfully achieved the industry’s first simultaneous uplink and downlink high-speed wireless calls between two mobile devices at uplink speeds four times faster than current UMTS services.

Nortel’s demonstration - planned to be repeated at next week’s 3GSM World Congress in Barcelona -- uses Nortel’s commercial UMTS Base Transceiver Station and Aeroflex’s TM500 handset simulator to exchange VOIP, videos and files at uplink speeds of 1.4 Mbps.

This achievement illustrates the potential viability of next-generation wireless technologies for high-bandwidth applications between mobile devices such as VOIP, video streaming, real-time high-definition mobile gaming and large file exchange. High-speed uplinks are particularly valued by media agencies transferring high-definition images and video content from locations with no broadband wireline access.

Nortel’s HSDPA technology is already being rolled out by operators to improve the downlink capacity of commercial 3G networks. Nortel’s HSUPA is expected to be available from the beginning of 2007 and to deliver a higher uplink throughput, reduced latency, and higher capacity, with a software upgrade of commercial networks.

“The successful demonstration of simultaneous HSUPA and HSDPA across our commercially available equipment highlights Nortel’s continuous drive for technological innovation within wireless broadband markets,” said Jean-Luc Jezouin, vice president GSM&UMTS Products, Nortel. “Nortel is committed to providing today’s wireless operators with simple, cost-effective solutions that improve the quality and range of services to subscribers to maximize opportunities for increased revenues.”

Nortel achieved the industry’s first HSDPA mobile call in January 2005. Nortel and LGE completed the first live test calls using a commercial handset solution for HSDPA in March 2005. In June 2005, Nortel became the first wireless network supplier to complete the TL9000 registration standard for Quality Management System Requirements and Measurements across its HSDPA, UMTS and GSM wireless infrastructure solutions. Nortel achieved the industry’s first HSDPA call at 3.6 Mbps in December 2005, and industry-first UMTS-HSDPA call in the 900 MHz band in January 2006.

Nortel has worked with a number of wireless operators on HSDPA trials and deployments, including EDGE Wireless in the US, SKT and KTF in Korea, SOFTBANK Group’s BB Mobile in Japan, mmO2, Orange, Vodafone (at CeBIT 2005 in Hanover, Germany), Partner Communications in Israel, and Mobilkom Austria.

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 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.

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Ben Roome

Nortel

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