Nortel PEC Solutions, DEA Launch Electronic Pharmaceutical Fulfillment System; New Network Optimizes Ordering Process, Reduces Operating Costs

Business Wire, Sept 6, 2005

WASHINGTON -- Nortel PEC Solutions(a), a Nortel Networks Corporation (NYSE:NT)(TSX:NT) subsidiary focused on professional technology services and high-end e-Government solutions, announced that its U.S. Drug Enforcement Administration (DEA) Controlled Substance Ordering System (CSOS) has received final approval from the DEA to begin electronic order fulfillment.

"Nortel PEC Solutions is delivering the highly-secure networking systems that are helping agencies like the DEA better manage and protect sensitive information," said Chuck Saffell, chief executive officer, Nortel PEC Solutions. "We work closely with our customers to design systems that streamline operations, are secure and reliable, and help improve the bottom line."

The CSOS system enables pharmaceutical supply chain organizations to order Schedule II controlled substances electronically. This is a more efficient alternative to the DEA paper Form 222 process that has been used over previous years to track Schedule II drugs such as morphine and oxycodone. This process has required triplicate paper copies to circulate in multiple loops between pharmacies, distributors, manufacturers and the DEA - often relying on the U.S. mail system for delivery.

The DEA and Nortel project team worked with more than 100 pharmaceutical groups along with state and local regulatory organizations in developing the standards for CSOS. This resulted in a well-defined set of Public Key Infrastructure (PKI)-based security and performance standards designed to help the industry transform its business processes and take full advantage of an automated transaction system.

An economic impact analysis by the DEA indicates that the industry can expect significant potential cost efficiencies, estimating CSOS adopters can save approximately US$26 per transaction. With over 7 million orders per year, the annual savings could exceed US$180 million.

"There is significant pent-up demand for automation in the healthcare vertical, and CSOS is a powerful first step toward increasing efficiencies and reducing costs in this highly-regulated environment," said Paul Rice, president, Nortel PEC Solutions. "The relationships we have established with the DEA have profoundly affected how we as a company look to deploy next generation PKI services to our numerous government customers. This effort is expected to pave the way to bring the benefits and operational efficiencies that are enabled by PKI to many more government agencies, employees, citizens and businesses."

About Nortel PEC Solutions

Nortel PEC Solutions is a trusted partner for governments to support the livelihood, security, and well-being of its citizens. It delivers a comprehensive portfolio of technology and high-end services capable of meeting the demands of the most complex and important systems in the world. Headquartered in Fairfax, Virginia, Nortel PEC Solutions engineers, deploys and manages mission-critical solutions for government, including homeland security, criminal justice and intelligence, defense and civilian agencies within the U.S. Federal Government and at state and local levels. Please visit www.nortelpec.com for additional information.

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, and any related potential dilution of Nortel's common shares; 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 control over financial reporting and the conclusion of Nortel's management and independent auditor that Nortel's internal control over financial reporting is ineffective, which could continue to impact Nortel's ability to report its results of operations and financial condition accurately and in a timely manner; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including 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 Nortel's and NNL's public filings; 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 and December 14, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions;