September 16, 2005 15:10 ET

Nortel, Employees Provide Support for Hurricane Katrina Disaster Relief and Recovery; Nortel to Match up to US$250,000 in Donations to American Red Cross

TORONTO--(CCNMatthews - Sep 16, 2005) -

Nortel (NYSE:NT)(TSX:NT) will contribute a total of up to US$250,000 to match employee donations made to the American Red Cross to aid victims of Hurricane Katrina, in addition to a number of relief and recovery efforts already underway.

Recovery efforts the company and its employees are focusing on include installing new communications systems in the Gulf Coast area to aid disaster recovery activities, as well as providing support and relief for evacuees and working with customers to repair damaged communications networks.

"On behalf of all Nortel, I offer our deepest condolences to the victims of Hurricane Katrina. Our thoughts are with those struggling to overcome the destruction it has left behind, and our actions are focused on recovery and relief," said Bill Owens, vice chairman and chief executive officer, Nortel. "Together with the American Red Cross, The Salvation Army and other organizations, we are working to provide recovery and relief to those that need it, wherever they are, as quickly as possible. Nortel stands by those affected."

Nortel disaster and emergency recovery teams have been working closely with customers and communities on network recovery preparations since well before the arrival of Hurricane Katrina. These teams have been, and continue, to work around the clock to restore network services for telecommunications companies in the affected areas. Emergency response personnel and a wide variety of wireless and wireline equipment have been dispatched and deployed to the region.

In addition, Nortel and its employees are making the following contributions:

-- Nortel telecommunications equipment is doubling call capacity for the Federal Emergency Call Center that manages disaster assistance requests for the three states hardest hit by the hurricane.

-- New telecommunications systems have been installed in evacuee centers to help the Social Security Administration issue benefit checks on-site to displaced enrollees.

-- Nortel is deploying wireless mesh technology to support command and control communications for National Guard personnel working relief efforts in the Gulf Coast area.

-- Nortel has deployed wireless equipment to enable communications between U.S. Navy relief personnel in New Orleans, the USS Iwo Jima assisting from the gulf, and Fleet Headquarters.

-- Nortel has dispatched containerized switching equipment to the Department of Homeland Security to expedite communications and operations.

-- To date, Nortel employees have contributed more than seven tons of supplies including bottled water, diapers, canned food and clothing to The Salvation Army to assist hurricane victims.

-- Regional Nortel campuses are channeling volunteers to relief centers and providing computer center support to help evacuees with activities such as setting up e-mail accounts, filing for disaster assistance, and searching Web sites for family members and friends.

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 For the latest Nortel news, visit

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 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); ongoing SEC reviews, which may result in changes to Nortel's and NNL's public filings; 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; stock market volatility generally and as a result of acceleration of the settlement date of Nortel's forward purchase contracts; 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; 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 Networks.

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