Nortel Statement on Optical Networking and Carrier Ethernet businesses

TORONTO, ONTARIO, Oct 05 (MARKET WIRE) --
Nortel(1) Networks Corporation (OTCBB: NRTLQ) today confirmed that it is
in advanced discussions with Ciena Corporation for the planned sale of
substantially all assets within its Optical Networking and Carrier
Ethernet businesses globally. The outcome of these discussions is
uncertain and subject to negotiation of definitive agreements. Any
agreements would be subject to a competitive bidding process to be
approved by the United States Bankruptcy Court for the District of
Delaware and the Ontario Superior Court of Justice.

About Nortel

Nortel delivers 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. 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", "should", "will", "anticipates", "believes",
"intends", "estimates", "targets", "plans", "envisions", "seeks" and
other similar language and are considered forward-looking statements or
information under applicable securities laws. 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 that are difficult to predict, and the actual outcome
may be materially different. Nortel's assumptions, although considered
reasonable by Nortel at the date of this press release, may prove to be
inaccurate and consequently Nortel's actual results could differ
materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated
in forward-looking statements as a result of the following: (i) risks and
uncertainties relating to Nortel's Creditor Protection Proceedings
including: (a) risks associated with Nortel's ability to: stabilize the
business and maximize the value of Nortel's businesses; obtain required
approvals and successfully consummate pending and future divestitures;
successfully conclude ongoing discussions for the sale of Nortel's other
assets or businesses; develop, obtain required approvals for, and
implement a court approved plan; resolve ongoing issues with creditors
and other third parties whose interests may differ from Nortel's;
generate cash from operations and maintain adequate cash on hand in each
of its jurisdictions to fund operations within the jurisdiction during
the Creditor Protection Proceedings; access the EDC Facility given the
current discretionary nature of the facility, or arrange for alternative
funding; if necessary, arrange for sufficient debtor-in-possession or
other financing; continue to have cash management arrangements and obtain
any further required approvals from the Canadian Monitor, the U.K. Joint
Administrators, the French Administrator, the Israeli Joint
Administrators, the U.S. Creditors' Committee, or other third parties;
raise capital to satisfy claims, including Nortel's ability to sell
assets to satisfy claims against us; maintain R&D investments; realize
full or fair value for any assets or business that are divested; utilize
net operating loss carryforwards and certain other tax attributes in the
future; avoid the substantive consolidation of NNI's assets and
liabilities with those of one or more other U.S. Debtors; attract and
retain customers or avoid reduction in, or delay or suspension of,
customer orders as a result of the uncertainty caused by the Creditor
Protection Proceedings; maintain market share,

as competitors move to capitalize on customer concerns; operate Nortel's
business effectively under the new organizational structure, and in
consultation with the Canadian Monitor the U.S. Creditors' Committee and
a proposed U.S. Officer, and work effectively with the U.K. Joint
Administrators, French Administrator and Israeli Joint Administrators in
their respective administration of the EMEA businesses subject to the
Creditor Protection Proceedings; continue as a going concern; actively
and adequately communicate on and respond to events, media and rumors
associated with the Creditor Protection Proceedings that could adversely
affect Nortel's relationships with customers, suppliers, partners and
employees; retain and incentivize key employees and attract new
employees, as may be needed; successfully implement Nortel's new
organizational structure to most effectively continue with the sales of
Nortel's businesses and complete integration processes with acquiring
companies and continue with Nortel's restructuring activities; retain, or
if necessary, replace major suppliers on acceptable terms and avoid
disruptions in Nortel's supply chain; maintain current relationships with
reseller partners, joint venture partners and strategic alliance
partners; obtain court orders or approvals with respect to motions filed
from time to time; resolve claims made against Nortel in connection with
the Creditor Protection Proceedings for amounts not exceeding Nortel's
recorded liabilities subject to compromise; prevent third parties from
obtaining court orders or approvals that are contrary to Nortel's
interests; reject, repudiate or terminate contracts; and (b) risks and
uncertainties associated with: limitations on actions against any Debtor
during the Creditor Protection Proceedings; the values, if any, that will
be prescribed pursuant to any court approved plan to outstanding Nortel
securities and, in particular, that Nortel does not expect that any value
will be prescribed to the NNC common shares or the NNL preferred shares
in any such plan; the delisting of NNC common shares from the NYSE; and
the delisting of NNC common shares and NNL preferred shares from the TSX;
and

(ii) risks and uncertainties relating to Nortel's business including: the
sustained economic downturn and volatile market conditions and resulting
negative impact on Nortel's business, results of operations and financial
position and its ability to accurately forecast its results and cash
position; cautious capital spending by customers as a result of factors
including current economic uncertainties; fluctuations in foreign
currency exchange rates; any requirement to make larger contributions to
defined benefit plans in the future; a high level of debt, arduous or
restrictive terms and conditions related to accessing certain sources of
funding; the sufficiency of workforce and cost reduction initiatives; any
negative developments associated with Nortel's suppliers and contract
manufacturers including Nortel's reliance on certain suppliers for key
optical networking solutions components and on one supplier for most of
its manufacturing and design functions; potential penalties, damages or
cancelled customer contracts from failure to meet contractual obligations
including delivery and installation deadlines and any defects or errors
in Nortel's current or planned products; significant competition,
competitive pricing practices, industry consolidation, rapidly changing
technologies, evolving industry standards, frequent new product
introductions and short product life cycles, and other trends and
industry characteristics affecting the telecommunications industry; any
material, adverse affects on Nortel's performance if its expectations
regarding market demand for particular products prove to be wrong;
potential higher operational and financial risks associated with Nortel's
international operations; a failure to protect Nortel's intellectual
property rights; any adverse legal judgments, fines, penalties or
settlements related to any significant pending or future litigation
actions; failure to maintain integrity of Nortel's information systems;
changes in regulation of the Internet or other regulatory changes; and
Nortel's potential inability to maintain an effective risk management
strategy.

For additional information with respect to certain of these and other
factors, see Nortel's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2009 and June 30, 2009 and Annual Report on Form 10-K for
the year ended December 31, 2008 and other securities filings with the
United States Securities and Exchange Commission. 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
Bo Gowan
+1-972-685-8278
bogowan@nortel.com

Nortel
Matthew Wray
+852-2100-2238
wraym@nortel.com

Nortel
Greta Brown
+44-(0)1628-432968
gretab@nortel.com
www.nortel.com

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