October 03, 2007 14:27 ET

Nortel Announces Percentage for Fixed Dividend Rate on Series 8 Preferred Shares issuable on conversion of Series 7 Preferred Shares

TORONTO, ONTARIO--(Marketwire - Oct. 3, 2007) - Nortel(1) Networks Limited (TSX:NT)(NYSE:NT) today announced that the fixed dividend rate for its Non-cumulative Redeemable Class A Preferred Shares Series 8 (the "Series 8 preferred shares") will be equal to 100% of the yield on five-year non-callable Government of Canada bonds to be determined on November 12, 2007. The Series 8 preferred shares will be issued as of December 1, 2007 to holders of Non-cumulative Redeemable Class A Preferred Shares Series 7 (the "Series 7 preferred shares") of Nortel Networks Limited (TSX:NTL.PR.G) who exercise their right to convert their Series 7 preferred shares, on a one-for-one basis, provided that a minimum number of Series 7 preferred shares are tendered for conversion. Conversion may also occur automatically if less than a minimum number of Series 7 preferred shares would remain outstanding after taking into account all Series 7 preferred shares tendered for conversion. If issued, the Series 8 preferred shares will pay, on a quarterly basis, as and when declared by the Board of Directors of Nortel Networks Limited, a cash dividend based on this fixed rate, which will be published on or about November 15, 2007 in two Canadian newspapers. This rate will be fixed for a period of 5 years. A written notice will be sent to holders of Series 7 preferred shares no later than October 17, 2007 summarizing their conversion rights.

Holders of Series 7 preferred shares who continue to hold such shares will continue to receive a monthly floating rate dividend as and when declared by the Board of Directors of Nortel Networks Limited. The floating rate dividend will continue to be based on the average prime rate of two Canadian banks in effect for each day of the applicable month.

About Nortel

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 For the latest Nortel news, visit

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.

(1)Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

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