BayStack Lifetime Warranty for All EMEA Customers and Channel Partners from Nortel Networks

Business Wire, June 1, 2004

Business Editors/High-Tech Writers

LONDON--(BUSINESS WIRE)--June 1, 2004

Nortel Networks (NYSE:NT)(TSX:NT) today announced Lifetime Warranty services for BayStack products across Europe, Middle East and Africa (EMEA). The warranty offer applies for all Nortel Networks BayStack Ethernet switch models in the market and is valid from June 1, 2004.

Nortel Networks has developed a service strategy to offer integrated product support for BayStack products, protecting the customer in the unlikely event of network downtimes and any subsequent reduced productivity. This offers customers a better total cost of ownership (TCO) and increase in return on investment (ROI) for their BayStack network solutions.

"Small and medium sized companies (SMBs) are striving for savings on their information technology (IT) spending wherever they can, especially on maintenance costs," said Ian Ashby, vice president, sales and marketing, NextiraOne. "Lifetime Warranty helps us provide a more cost-effective service to companies to help them meet their spending objectives."

Lifetime Warranty will be guaranteed for all BayStack products across end-users and channel partners. If a service interruption occurs, Nortel Networks will exchange any hardware on the basis of the latest advanced replacement service including next business day shipment until the product is discontinued. In addition, Nortel Networks offers free technical support that covers the first 90 days after purchase and free software updates for the life of the product.

"Customers' networks are much more business-critical these days as they move from being a business aid to something the business cannot live without," said Sanjeev Gupta, director data business, Enterprise Europe, the Middle East and Africa (EMEA), Nortel Networks. "We are committed to ensuring our products and solutions are of the utmost reliability in meeting those requirements. Product quality and dependability are designed and built into every aspect of our networking solutions. Taking this a step further, the Lifetime Warranty backs up our commitment of quality and dependability to all our customers."

"Ethernet switching is an extremely competitive business across EMEA," said Nick Dean, European director of Professional Services, Azlan. "Introducing a Lifetime Warranty along with the recent refresh of the product line shows Nortel Networks is really serious about this market."

BayStack switches offer advanced software features, management functions and high-bandwidth wire speed connections in a variety of low cost flexible platforms. BayStack switches range from small standalone switches ideal for SMBs through to the 'flagship' BayStack 5510 which delivers the capabilities required in the wiring closet of large enterprise networks. Compact 1U rack-mount designs provide high port density in a small footprint. With the use of the unique BayStack cascade stacking capability, up to 8 mixed switch-type units can be combined to offer hundreds of ports in one managed entity, with no single point of failure. The BayStack 460 with its advanced QoS capabilities and standard 802.3af Power over Ethernet, has become the product of choice for Nortel Networks customers deploying convergence and VoIP.

Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The Company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at www.nortelnetworks.com or www.nortelnetworks.com/media_center.> 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 Nortel Networks independent review and planned restatement of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004; the impact of the inability to meet Nortel Networks filing obligations on support facilities and public debt obligations; the sufficiency of Nortel Networks restructuring activities, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; continued reductions in spending by Nortel Networks customers; fluctuations in Nortel Networks operating results and general industry, economic and market conditions and growth rates; the communication by Nortel Networks auditors of the existence of material weaknesses in internal control; Nortel Networks ability to recruit and retain qualified employees; fluctuations in Nortel Networks cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel Networks normal course business activities; the dependence on Nortel Networks subsidiaries for funding; the impact of Nortel Networks defined benefit plans and deferred tax assets on results of operations and Nortel Networks cash flows; Nortel Networks dependence on new product development and its ability to predict market demand for particular products; Nortel Networks 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 Networks 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 of Nortel Networks purchase contracts; the impact of Nortel Networks 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; the future success of Nortel Networks strategic alliances; and the adverse resolution of litigation, investigations, intellectual property disputes and similar matters.