Nortel Networks Extends Global Leadership in Optical Internet

Ranks #1 globally in DWDM and SONET/SDH optical solutions in 1999

BRAMPTON, Ontario, Canada. Nortel Networks* [NYSE/TSE: NT] expanded its Optical Internet leadership position in 1999 according to the latest figures released by RHK (Ryan Hankin Kent), a leading independent market research and consulting firm. The company ranked #1 globally in the US$19.4 billion market for Dense -Wavelength Division Multiplexing (D-WDM) and SONET/SDH Optical Internet solutions with market shares of 32% and 26% respectively, representing significant gains over its competitors. "We are very pleased with the Optical Internet market share gains we ve made this year," said Clarence Chandran, President, Carrier and Service Provider Solutions. "We re growing our optical business at triple digit rates and tripling our production capacity next year to meet global customer demand for bandwidth being fueled by the Internet revolution and the growth in eBusiness."

Optical Market Share Gains RHK released the following market share results for Nortel Networks at the STARTRAX 99 conference: · #1 global leader in D-WDM and SONET/SDH optical solutions with market shares of 32% and 26% respectively. · #1 in D-WDM systems in North America with 37% market share, a gain of 8 percentage points since 1998. · #1 in SONET systems in North America with a 41% market share, a gain of 7 percentage points since 1998. "This year, Nortel Networks reinforced its leading D-WDM and SONET/SDH market positions in North America, while strengthening its position in the rest of the world," said Voltaire Cacal, Senior Analyst at RHK. "This has allowed Nortel Networks to become the global market share leader in terrestrial optical systems. The company also continues to secure its position in 10 Gigabit per second systems and other high capacity transport."

Nortel Networks is setting the pace for the industry in terms of state of the art optical systems and component technology, a powerful next generation portfolio, and the skill to rapidly deploy and service high performance optical systems around the globe. Recently, Nortel Networks announced that it is investing US$400 million in its booming optical networking and components business to triple production capacity in 2000. This is in addition to the doubling of production capacity already this year. The company also unveiled two major breakthrough technologies since September: · OPTera* Packet Solution which will unify packet and optical networks and enable terabit speed optical switching and routing capabilities to overcome Internet traffic congestion. · The world s first system to deliver 6.4 terabits per second on a single fiber as demonstrated at Telecom 99. Nortel Networks is building 32 out of the 40 national and pan-European optical networks announced over the past two years. These networks are the foundation for the high performance Internet that will deliver increased speed, reliability, quality, profitability, and new economics.

RHK (Ryan Hankin Kent, Inc.) is a leading market research and consulting firm specializing in the analysis of advanced technologies for the public telecommunications network. The company provides subscription services and custom consulting to technology vendors, service providers and the investment community on North American and European markets. RHK is based in South San Francisco, California. For more information, visit the company s Web site at www.rhk.com Nortel Networks is a global leader in telephony, data, wireless and wireline solutions for the Internet. The Company had 1998 revenues of US$17.6 billion and serves carrier, service provider and enterprise customers globally. Today, Nortel Networks is creating a high-performance Internet that is more reliable and faster than ever before. It is redefining the economics and quality of networking and the Internet through Unified Networks* that promise a new era of collaboration, communications and commerce. Visit us at www.nortelnetworks.com.

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 impact of price and product competition; the dependence on new product development; the impact of rapid technological and market change; the ability of Nortel Networks to integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; unanticipated impact of Year 2000 issues; and the impact of consolidations in the telecommunications industry. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Nortel Networks 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 Networks, the Nortel Networks Globemark, OPTera, Unified Networks and How the world shares ideas are trademarks of Nortel Networks.

Contact for Press and Analysts: Jeff Ferry Nortel Networks 703-712-8339 jferry@nortelnetworks.com