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May 13, 2003

Nortel Networks Introduces Succession Interoperability Program

Program Designed to Increase Flexibility of Circuit-to-Packet Migration, Speed Deployment of Multimedia Services

RESEARCH TRIANGLE PARK, N.C. - To further advance its Succession Services initiative announced in February 2003, Nortel Networks* [NYSE/TSX: NT] introduced an interoperability program focused on end-to-end voice over Internet Protocol (VoIP) solutions that help accelerate the time-to-market of packet voice and new session initiation protocol (SIP)-based multimedia services for enterprises and residential subscribers.

This program reinforces Nortel Networks on-going commitment to interoperability and standards compliance, and leverages Nortel Networks understanding of real world, multi-vendor VoIP and multimedia service deployments.

Part of Nortel Networks Developer Program, this new program will focus on enabling interoperability of Nortel Networks Succession Interactive Multimedia Server (IMS), Succession MX and Succession Communication Server 2000 superclass softswitches with key third-party products. In addition, Nortel Networks has dedicated state-of-the-art laboratory facilities configured to represent ‘real-world’ carrier networks, as well as a team of experienced interoperability professionals.

“Nortel Networks is focused on helping wireline and wireless service providers generate new service revenue opportunities by speeding deployment of next generation, converged applications,” said Sue Spradley, president, Wireline Networks, Nortel Networks. “Through interoperability testing with other industry leaders, Nortel Networks can expand the number of available applications while simplifying network deployments, making it more cost-effective for service providers to expand their business and offer new services.”

As part of this program, Nortel Networks has completed interoperability testing with industry-leading third party vendors, and is either in the process of testing or scheduling further interoperability testing with others.

Nortel Networks has completed interoperability testing with the Comverse network-based voice mail system, a component of its enhanced services platform. Comverse’s open, IP-based, modular platform addresses the need for a highly scalable and feature rich messaging system to complement Nortel Networks IMS to enable additional revenue opportunities for carriers.

Nortel Networks plans to conduct interoperability testing with ipDialog, whose SIP-based phones for the enterprise, small office and residential markets address the need for low cost, retail SIP-based CPE choices. ipDialog’s family of readily-customizable Ethernet phones will support Nortel Networks commitment to meet specific needs and requirements of service providers.

Nortel Networks is currently conducting interoperability testing with Mediatrix, whose Mediatrix 1104 access device and Mediatrix 1204 gateway provide IP connectivity for conventional analog telephones, PBX and Key Systems, protecting enterprise investments and delivering a cost-effective solution for legacy to IP networking.

Nortel Networks intends to conduct interoperability testing between Newport Networks MediaProxy 1460 session controller and Succession IMS to provide service providers with greater solution flexibility for SIP-based voice and multimedia services. Newport’s media proxy enables control and management of media streams to deliver commercial IP telephony and multimedia content, and to deliver scalable, reliable and feature-rich solutions to subscribers.

Nortel Networks is scheduling SIP interoperability testing between Ubiquity’s SIP Application Server (SAS) and Nortel Networks Succession IMS. Ubiquity’s SAS supports the JAIN SIP Servlet specification that will provide Nortel Networks customers with a Java-based application creation environment to rapidly develop and deploy revenue-generating applications for both wireline and wireless networks.

Nortel Networks is currently conducting interoperability testing with VegaStream Ltd to provide ISDN PRI VoIP gateways for connectivity between IP networks and existing ISDN equipment, driving enterprise investment protection and service provider deployment flexibility.

ARRIS has joined the Nortel Networks Developer Program. Its PacketCableTM and DOCSIS® 1.1 qualified CMTS (Cable Modem Termination Systems) and DOCSIS 1.1 certified MTAs (Multimedia Termination Adapters) provide the customer premise termination for cable VoIP applications. Nortel Networks Succession Communication Server 2000-Compact and associated core products deliver the features and call control functionality, integrated with the ARRIS family of cable access products for full-featured residential primary line service, completing the cable operator's triple play. This solution has a real world deployment track-record in Charter Communications.

Nortel Networks Succession Communication Server 2000 and 2000-Compact superclass softswitches are in a leadership position in terms of implementation and deployment of industry standard protocols. Nearly 40 percent of Nortel Networks live carrier VoIP network deployments are in multivendor environments.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com.

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 severity and duration of the industry adjustment; the sufficiency of our restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; fluctuations in operating results and general industry, economic and market conditions and growth rates; the ability to recruit and retain qualified employees; fluctuations in cash flow, the level of outstanding debt and debt ratings; the ability to meet financial covenants contained in our credit agreements; the ability to make acquisitions and/or 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; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; the dependence on new product development; the uncertainties of the Internet; the impact of the credit risks of our customers and the impact of customer financing and commitments; stock market volatility; the entrance into an increased number of supply and outsourcing contracts which contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; the ability to obtain timely, adequate and reasonably priced component parts from suppliers and internal manufacturing capacity; the future success of our strategic alliances; and the adverse resolution of litigation. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Unless otherwise required by applicable securities laws, Nortel Networks 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 Networks, the Nortel Networks logo, the Globemark, Succession and Passport are trademarks of Nortel Networks.

Contact for Press and Analysts:

Ann Fuller
Nortel Networks
(613) 768-1208
afuller@nortelnetworks.com

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