Postal Service Extends IT Services Contract With Nortel Government Solutions

Market Wire, March, 2008

Neither snow, nor rain, nor heat, nor gloom of night stop the U.S. Postal Service(1) (USPS(1)). To help keep it that way, the agency has awarded a one-year, estimated US$6 million IT services contract extension to Nortel Government Solutions.(1)

This extension for services to support the PostalOne!(1) automated mail handling system follows a one-year, US$9.6 million extension in 2006. Nortel Government Solutions is a U.S. company wholly owned by Nortel(1) (TSX: NT)(NYSE: NT).

The PostalOne! (2) system helps integrate and optimize business mail handling, which is a nearly US$40 billion annual business for USPS. It also provides financial management data, as well as online access to tracking and status information for both USPS and its business customers.

"We're continuing to work with the Postal Service not only to keep PostalOne! running efficiently, but also to provide new applications and enhancements designed to help raise the level of customer service," said Chuck Saffell, chief executive officer, Nortel Government Solutions.

Nortel Government Solutions provides software design, secure data management and integration of the PostalOne! system with legacy USPS systems and third-party applications. This includes development and enhancement of mail processing support applications to handle an estimated two million new addresses each year.

Nortel Government Solutions has provided systems and application development, engineering and network administration services for USPS since 1993.

About the U.S. Postal Service

An independent federal agency, the U.S. Postal Service (2) is the only delivery service that visits every address in the nation - 146 million homes and businesses. It has 37,000 retail locations and relies on the sale of postage, products and services to pay for operating expenses, not tax dollars. The Postal Service has annual revenues of US$75 billion and delivers nearly half the world's mail.

About Nortel Government Solutions

Nortel Government Solutions is a network-centric integrator, converging IT services and communications to help government ensure the security, livelihood and well being of its citizens. Headquartered in Fairfax, Va., Nortel Government Solutions offers a one-stop shop for solutions designed to improve workforce productivity, reduce operating costs and streamline inter-agency communications. Please visit www.nortelgov.com for more information.

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 Form10-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. Nortel Government Solutions and the Nortel Government Solutions logo are trademarks of Nortel Government Solutions Incorporated. PostalOne!, USPS and Postal Service are trademarks of the United States Postal Service.

(2)This is a 3rd party link as described in our Web linking practices .

Contacts: Nortel Mark Buford (972) 362-1512 Email: mark.buford@nortel.com Website: www.nortelgov.com