Nortel

Nortel

March 01, 2005 21:00 ET

Nortel Launches Supply Chain Center in Shanghai to Enhance Customer Value; Enhanced Management of Growing Supply Base in Asia to Benefit Customers Worldwide


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: NORTEL

NYSE, TSX SYMBOL: NT

MARCH 1, 2005 - 21:00 ET

Nortel Launches Supply Chain Center in Shanghai to
Enhance Customer Value; Enhanced Management of Growing
Supply Base in Asia to Benefit Customers Worldwide

SHANGHAI, China--(CCNMatthews - Mar 1, 2005) -

As part of an ongoing supply chain evolution intended to reduce cost and
maximize quality, Nortel (NYSE:NT)(TSE:NT) has launched a supply chain
center in Shanghai. The Shanghai Supply Chain Center is the first in a
series Nortel plans to deploy around the world and a major step in
Nortel's strategy to create the industry's leading supply chain. Similar
launches are being planned in India, North America, Eastern Europe and
Mexico throughout 2005.

Nortel's Supply Chain Centers work closely with a wide range of global
and regional suppliers by providing the best expertise available to
ensure that all materials and processes meet Nortel's stringent quality
standards and maximize cost effectiveness for manufacturing, network
solutions and services. The Shanghai Supply Chain Center will be focused
on managing these objectives with Nortel's fast-growing base of
suppliers in Asia.

"This is another important step forward in Nortel's continued focus on
optimizing global supply chain resources and investments to strengthen
its competitive advantage while enhancing value for customers around the
world," said Sue Spradley, president, Global Operations, Nortel. "With
establishment of the Shanghai Supply Chain Center, we are applying
'best-in-class' manufacturing capabilities in the region with close
supplier collaboration to ignite and power global commerce."

The Shanghai Supply Chain Center is also expected to provide strong
support for Nortel's growing research and development presence in China,
which is intended to enhance value for customers in the region as well
as those in other parts of the world.

"The Asian and Greater China Regions have emerged as a major supply base
with 'best-in-class' manufacturing technologies," said Robert Mao,
president and chief executive officer, Greater China, Nortel. "Launch of
the Shanghai Supply Chain Center not only enables us to work more
efficiently with our suppliers in the region and identify new sources of
supply, but also to create closer synergy with our R&D initiatives in
China and to elevate our customer responsiveness to a new level."

Over the past six years, Nortel has divested most of its manufacturing
activities to electronic manufacturing services suppliers. This strategy
has positioned Nortel to concentrate on its core competencies and
address changing market needs with cost-effective solutions of premium
quality.

The Shanghai Supply Chain Center is an expansion of the existing
wholly-owned Nortel Networks Telecommunications Equipment (Shanghai)
Company Limited.

Nortel has established a significant presence in China, including three
manufacturing and service joint ventures and two world-class research
and development centers in Beijing and Guangzhou in addition to the
Shanghai operation.

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 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
Networks.

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