Nortel, BB Mobile Show Seamless Wireless Mobility Between 3G, Wireless Local Area Networks

25 June 2005

Nortel* [NYSE/TSX: NT] and BB Mobile, a SOFTBANK Group company, have achieved a second wireless industry milestone with what is believed to be the world's first seamless handoff of voice and data services between a third generation (3G) cellular network operating on the 1.7 GHz radio frequency band and a wireless local area network (LAN).

The test calls, completed on a live Universal Mobile Telecommunications System ( UMTS ) 3G cellular network and an 802.11 wireless LAN, signal a new level of freedom, access and mobility for mobile phone users.

Without interruption and using a single device, users will now be able to roam securely between 3G wireless networks and Wi-Fi networks or wireless LANs while browsing the Internet, sending and receiving e-mails, downloading files, and performing other high-speed wireless broadband voice and data services. This seamless mobility is enabled by intelligence built into the network by Nortel.

Setting a new benchmark in convergence, this real-world field test builds on another wireless data transmission success by Nortel and BB Mobile earlier this month. The previous trial achieved Japan's first 14.4 million bits per second ( Mbps ) wireless data transmission using the 1.7 GHz radio frequency band for mobile communications and Nortel's high-speed downlink packet access ( HSDPA ) technology to deliver speeds 30 times faster than commercially deployed networks using UMTS.

"This second demonstration with BB Mobile is an important step in meeting the demand for ubiquitous wireless broadband voice and data services regardless of network or device," said Peter MacKinnon, president GSM/UMTS, Nortel. "The success of the field trials also reinforces Nortel's commitment to working with service providers to develop and deliver high-quality wireless broadband solutions that enhance subscribers' communications experience and increase operator revenue potential."

"The results of these tests with BB Mobile also highlight the level of technological innovation we will continue to bring to Japan’s wireless industry to help drive network convergence and bridge the gap between wireline and wireless 3G networks." said Nick Vreugdenhil, country manager, Japan, Nortel.

Both BB Mobile trials were held in Japan's Tokyo and Saitama prefecture using a live UMTS network at 1.7GHz with Nortel's core network and access network including base stations. The HSDPA tests were conducted after a trial license for W-CDMA at 1.7GHz spectrum was issued by Japan's telecommunications regulator on May 30, 2005.

Nortel recently announced that it has become the first wireless networks supplier to successfully complete a TL 9000 consolidation registration across an end-to-end portfolio of hardware, software and services for HSDPA, UMTS and GSM wireless infrastructure solutions.

Nortel has designed, installed and launched more than 300 wireless networks in over 70 countries. Nortel was the first supplier with wireless networks operating in all advanced radio technologies, and is the only end-to-end provider of all next generation wireless solutions.

About SOFTBANK Group

SOFTBANK Group is a corporate group dedicated to the development of broadband-related businesses, building on the conviction that broadband will accelerate the pace of the IT revolution in the 21st century. SOFTBANK is Japan's #1 provider of broadband infrastructure services, and its fixed-line broadband service Yahoo! BB has exceeded 30 percent household penetration in a few short years. The Group's BB Mobile subsidiary signals its move into broadband mobile telephony, data and multimedia services. More information on SOFTBANK Group is available on the Web at www.softbank.co.jp.**

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 breach of its support facility and public debt obligations and 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 our public filings; the potential delisting or suspension of Nortel's and NNL's publicly traded securities; 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; cautious or reduced spending by Nortel's customers; increased consolidation among Nortel's customers and the loss of customers in certain markets; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's monitoring of the capital markets for opportunities to improve its capital structure and financial flexibility; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's 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 and consolidation in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel's 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, which is currently not available, of Nortel's forward purchase contracts; negative developments associated with Nortel's supply contracts and contract manufacturing agreements, including as a result of using a sole supplier for a key component of certain Optical Networks solutions; the impact of Nortel's 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; and the future success of Nortel's strategic alliances. For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel 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.

*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

**This is a 3rd party link as described in our Web linking practices.

Contact for Press and Analysts:

Takahide Miyatsu
Nortel
+81 3 5740 1342
miyatsu@nortel.com

Ben Roome
Nortel
+44 1628 43 3113
benroome@nortel.com

Jamie Moody
Nortel
972-684-7167
moodyjam@nortel.com