Nortel

Nortel

March 22, 2005 17:00 ET

Nortel Declares Preferred Share Dividends


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: NORTEL

NYSE, TSX SYMBOL: NT

MARCH 22, 2005 - 17:00 ET

Nortel Declares Preferred Share Dividends

TORONTO--(CCNMatthews - Mar 22, 2005) -

The board of directors of Nortel Networks Limited today declared a
dividend on each of the outstanding Cumulative Redeemable Class A
Preferred Shares Series 5 (TSX:NTL.PR.F) and the outstanding
Non-cumulative Redeemable Class A Preferred Shares Series 7
(TSX:NTL.PR.G). The dividend amount for each series is calculated in
accordance with the terms and conditions applicable to each respective
series, as set out in the Company's articles. The annual dividend rate
for each series floats in relation to changes in the average of the
prime rate of Royal Bank of Canada and The Toronto-Dominion Bank during
the preceding month ("Prime") and is adjusted upwards or downwards on a
monthly basis by an adjustment factor which is based on the weighted
average daily trading price of each of the series for the preceding
month, respectively. The maximum monthly adjustment for changes in the
weighted average daily trading price of each of the series will be plus
or minus 4.0% of Prime. The annual floating dividend rate applicable for
a month will in no event be less than 50% of Prime or greater than
Prime. The dividend on each series is payable on May 12, 2005 to
shareholders of record of such series at the close of business on April
29, 2005.

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. Serving both
service provider and enterprise customers, Nortel delivers innovative
technology solutions encompassing end-to-end broadband, Voice over IP,
multimedia services and applications, and wireless broadband designed to
help people solve the world's greatest challenges. 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; the findings of Nortel's independent
review and implementation of recommended remedial measures; the outcome
of the 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 controls over
financial reporting; the impact of Nortel's and NNL's failure to timely
file their financial statements and related periodic reports, including
breach of its support facility and public debt obligations and Nortel's
inability to access its shelf registration statement filed with the
United States Securities and Exchange Commission ("SEC"); ongoing SEC
reviews, which may result in changes to our public filings; the
potential delisting or suspension of Nortel's and NNL's publicly traded
securities; 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,
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; 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 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; stock market volatility generally
and as a result of acceleration of the settlement date or early
settlement, which is currently not available, of Nortel's forward
purchase contracts; 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; and the future success of Nortel's strategic
alliances.

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.

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