Nortel Declares Preferred Share Dividends

TORONTO, ONTARIO, Jul 31 (MARKET WIRE) --
The board of directors of Nortel(1) Networks Limited (the "Company")
today declared a dividend in respect of each of the months of September
and October 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 of incorporation. 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
that is based on the respective weighted average daily trading price of
each series for the preceding month. The maximum monthly adjustment for
changes in the weighted average daily trading price of each 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 in respect of the month
of September is payable on October 14, 2008 to shareholders of record of
such series at the close of business on September 30, 2008. The dividend
on each series in respect of the month of October is payable on November
12, 2008 to shareholders of record of such series at the close of
business on October 31, 2008.

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 www.nortel.com.
For the latest Nortel news, visit www.nortel.com/news.

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 Form 10-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.

Contacts:
Nortel
Mohammed Nakhooda
Media
(905) 863-7407
Email: mohammna@nortel.com

Nortel
Investors
1-888-901-7286 or (905) 863-6049
Email: investor@nortel.com
Website: www.nortel.com

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