ITPC to Improve Communications Across Iraq With Nortel Optical Solution

London, November 20 (ots/PRNewswire) -

- National Optical Backbone Network to Deliver Communications
Services for Iraqi Residents and Businesses

Iraq Telecommunications & Post Corporation (ITPC), Iraq's sole
fixed-line operator, has awarded Nortel[1] [NYSE: NT;TSX: NT] a US$20
million contract to build a nationwide optical backbone to deliver
high-quality high-bandwidth data, video and multimedia services for
personal and business communications. Nortel was selected by ITPC as
the prime contractor for the Iraq national optical backbone following
a public tender process.

"This national project is vitally important to the many
telecommunications projects underway that will help rebuild the
capabilities of the Iraqi society and economy," said H.E. Mohamed
Allawi, Iraq Minister of Communications. "We selected Nortel's
advanced networking technology as the right foundation for Iraqi
telecommunications and are confident that the improved communications
made possible by this network will help accelerate the reconstruction
of our country."

"Restoring and improving countrywide communications is vital for
the reconstruction of Iraq," said Simon Beard, director of Middle
East Business Development, Nortel EMEA. "This contract is testament
to Nortel's successful record of DWDM transmission projects in Iraq
since 2004 and our continuing commitment to proactively partner with
ITPC in its efforts to rebuild Iraqi communications."

The new network will link to the ITPC's Iraq South Ring DWDM
network - built by Nortel in 2004 as part of the US aid-funded Iraq
reconstruction programme. The network delivers broadband optical
services between Baghdad and Basra.

Under the terms of the contract, Nortel will supply a national
optical backbone network that covers a distance of 5000 kilometers
and includes 35 major cities. The network will be constructed using
Nortel's next generation DWDM (Dense Wavelength Division
Multiplexing) solution including Common Photonic Layer (CPL), Optical
Multiservice Edge (OME) 6500 terminals with electronic dispersion
management technology and Optical Network Manager for simplifying
field operations. The resilient network comprises seven interlocking
rings providing a bandwidth capacity of up to 160Gbp/s per ring.

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. Our next-generation technologies, for both service
providers and enterprises, span access and core networks, support
multimedia and business-critical applications, and help eliminate
today's barriers to efficiency, speed and performance by simplifying
networks and connecting people with information. 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 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. Nortel has made
various assumptions in the preparation of its financial outlook in
this press release, including the following company specific
assumptions: no further negative impact to Nortel's results of
operations, financial condition and liquidity arising from Nortel's
restatements of its financial results; Nortel's prices increasing at
or above the rate of price increases for similar products in
geographic regions in which Nortel sells its products; increase in
sales to Nortel's enterprise customers and wireless service provider
customers in the Asia Pacific region as a result of Nortel's joint
venture with LG Electronics Inc.; anticipated growth in sales to
enterprise customers, including the full year impact to Nortel's
revenues from its acquisition of PEC Solutions, Inc., (now Nortel
Government Solutions Incorporated); improvement in Nortel's product
costs due to favorable supplier pricing substantially offset by
higher costs associated with initial customer deployments in emerging
markets; cost reductions resulting from the completion of Nortel's
significant financial restatements and 2004 restructuring plan; a
moderate increase in costs over 2005 related to investments in the
finance organization and remedial measures related to Nortel's
material weaknesses in internal controls; increased employee costs
relative to expected cost of living adjustments and employee bonuses
offset by a significant reduction in executive recruitment and
severance costs incurred in 2005; and the effective execution of
Nortel's strategy. Nortel has also made certain macroeconomic and
general industry assumptions in the preparation of its financial
guidance including: a modest growth rate in the gross domestic
product of global economies in the range of 3.9% which is higher than
the growth rate in 2005; global service provider capital expenditures
in 2006 reflecting mid to high single digit growth as compared to low
double digit growth in 2005; a general increase in demand for
broadband access, data traffic and wireless infrastructure and
services in emerging markets with the rate of growth in developed
markets beginning to slow; and a moderate impact as a result of
expected industry consolidation among service providers in various
geographic regions, particularly in North America and EMEA. The above
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 its expectations
set out in this press release.

Further, 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
restatements and related matters including: Nortel's most recent
restatement and two previous restatements of its financial statements
and related events; the negative impact on Nortel and NNL of their
most recent restatement and delay in filing their financial
statements and related periodic reports; legal judgments, fines,
penalties or settlements, or any substantial regulatory fines or
other penalties or sanctions, related to the ongoing regulatory and
criminal investigations of Nortel in the U.S. and Canada; any
significant pending civil litigation actions not encompassed by
Nortel's proposed class action settlement; any substantial cash
payment and/or significant dilution of Nortel's existing equity
positions resulting from the approval of its proposed class action
settlement; any unsuccessful remediation of Nortel's material
weaknesses in internal control over financial reporting resulting in
an inability to report Nortel's results of operations and financial
condition accurately and in a timely manner; the time required to
implement Nortel's remedial measures; Nortel's inability to access,
in its current form, its shelf registration filed with the United
States Securities and Exchange Commission (SEC), and Nortel's below
investment grade credit rating and any further adverse effect on its
credit rating due to Nortel's restatements of its financial
statements; any adverse affect on Nortel's business and market price
of its publicly traded securities arising from continuing negative
publicity related to Nortel's restatements; Nortel's potential
inability to attract or retain the personnel necessary to achieve its
business objectives; any breach by Nortel of the continued listing
requirements of the NYSE or TSX causing the NYSE and/or the TSX to
commence suspension or delisting procedures; (ii) risks and
uncertainties relating to Nortel's business including: yearly and
quarterly fluctuations of Nortel's operating results; reduced demand
and pricing pressures for its products due to global economic
conditions, significant competition, competitive pricing practice,
cautious capital spending by customers, increased 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; the sufficiency of recently announced
restructuring actions, including the potential for higher actual
costs to be incurred in connection with these restructuring actions
compared to the estimated costs of such actions and the ability to
achieve the targeted cost savings and reductions of Nortel's unfunded
pension liability deficit; any material and adverse affects on
Nortel's performance if its expectations regarding market demand for
particular products prove to be wrong or because of certain barriers
in its efforts to expand internationally; any reduction in Nortel's
operating results and any related volatility in the market price of
its publicly traded securities arising from any decline in its gross
margin, or fluctuations in foreign currency exchange rates; any
negative developments associated with Nortel's supply contract and
contract manufacturing agreements including as a result of using a
sole supplier for key optical networking solutions components, and
any defects or errors in Nortel's current or planned products; any
negative impact to Nortel of its failure to achieve its business
transformation objectives, including completion of the sale of its
UMTS access business to Alcatel; additional valuation allowances for
all or a portion of its deferred tax assets; Nortel's failure to
protect its intellectual property rights, or any adverse judgments or
settlements arising out of disputes regarding intellectual property;
changes in regulation of the Internet and/or other aspects of the
industry; Nortel's failure to successfully operate or integrate its
strategic acquisitions, or failure to consummate or succeed with its
strategic alliances; any negative effect of Nortel's failure to
evolve adequately its financial and managerial control and reporting
systems and processes, manage and grow its business, or create an
effective risk management strategy; and (iii) risks and uncertainties
relating to Nortel's liquidity, financing arrangements and capital
including: the impact of Nortel's most recent restatement and two
previous restatements of its financial statements; any inability of
Nortel to manage cash flow fluctuations to fund working capital
requirements or achieve its business objectives in a timely manner or
obtain additional sources of funding; high levels of debt,
limitations on Nortel capitalizing on business opportunities because
of support facility covenants, or on obtaining additional secured
debt pursuant to the provisions of indentures governing certain of
Nortel's public debt issues and the provisions of its support
facility; any increase of restricted cash requirements for Nortel if
it is unable to secure alternative support for obligations arising
from certain normal course business activities, or any inability of
Nortel's subsidiaries to provide it with sufficient funding; any
negative effect to Nortel of the need to make larger defined benefit
plans contributions in the future or exposure to customer credit
risks or inability of customers to fulfill payment obligations under
customer financing arrangements; any negative impact on Nortel's
ability to make future acquisitions, raise capital, issue debt and
retain employees arising from stock price volatility and further
declines in the market price of Nortel's publicly traded securities,
or the planned share consolidation resulting in a lower total market
capitalization or adverse effect on the liquidity of Nortel's common
shares. For additional information with respect to certain of these
and other factors, see Nortel's Annual Report on Form10-K/A,
Quarterly Report 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. Use of the terms "partner" and "partnership" does
not imply a legal partnership between Nortel and any other party.

www.nortel.com

ots Originaltext: Nortel Networks
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Contact:
For more information: Jose-Luis Menoyo , +34-917094567,
menoyo@nortel.com; Greta Brown, +44-1628-432968, gretab@nortel.com;
Pat Cooper, +1-425-450-7523, pat.cooper@nortel.com, www.nortel.com