Sprint Nextel Selects Nortel to Supply Next Generation Broadband Access Solution

OCTOBER 25, 2005, TORONTO—Sprint Nextel's [NYSE: S] local telecommunications division has selected Nortel* [NYSE/TSX: NT] as a supplier of its next generation broadband access solution slated for local market deployments in 18 U.S. states. The solution will be deployed as a part of Sprint Nextel's industry-leading initiative to evolve its entire local switching network with a simplified, next generation IP network.

Under terms of a two-year contract, Nortel's multiservice Ultra Broadband access platform, the Calix C7, has been standardized by Sprint Nextel for deployment in their local markets. The solution has already been deployed in Sprint Nextel's Waterville, Ohio local market.

"Sprint Nextel wanted a solution that would allow us to provide superior voice, and data services to our residential and business customers, supporting today's existing services while enabling a seamless path to the advanced services that will differentiate us in tomorrow's market," said Jim Hansen, senior vice president of Network-LTD at Sprint Nextel. "Nortel provides those capabilities, and our long relationship with them provides us with the assurance that we have a technology partner to help us deliver services to our customers quickly and cost-effectively."

"Sprint Nextel is positioning itself as an industry leader through its decision to packetize its entire network and deploy a next generation broadband infrastructure," said Walt Megura, general manager, Broadband Networks, Nortel. "Our solution simplifies the network by supporting multiple services with a single platform, and enables Sprint Nextel to offer new differentiated services that offer significant revenue potential."

Nortel's broadband access platform, the Calix C7, is sold by Nortel as part of a strategic alliance entered into with Calix in 2004. Sprint Nextel will use the solution in the access portion of its network to support the integrated delivery of advanced voice, video and data.

"Working with Nortel from integration testing through field deployment has been vital to successfully addressing the needs of Sprint Nextel," said John Colvin, Calix vice president of field operations. "Our relationship with Nortel will continue to be important as Sprint Nextel drives its network transformation toward an Ultra Broadband, all-packet, increasingly fiber access network."

The Calix C7 will be deployed in the local network, with each platform supporting as many as 480 DSL or 1,280 Broadband Passive Optical Network (BPON) connections to residential and business customers. The platform's massive bandwidth and high-density copper and fiber connectivity give service providers a seamless transition from traditional voice and DSL services to next generation packet and optical services. More than one million Calix C7 ports are now in service with carrier networks across North America.

About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services to consumer, business and government customers. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international push-to-talk capabilities; and an award-winning and global Tier 1 Internet backbone. For more information, visitwww.sprint.com/mr.

About Calix
Calix is a leading supplier of telecommunications solutions designed to simplify all aspects of information, communication, and entertainment service delivery to business and residential subscribers for local exchange carriers of all sizes. Providing extensive optical and metallic density, unprecedented access capacity and functional headroom, advanced management and provisioning capabilities, and broad service flexibility, the packet-based Calix C7 platform has been deployed in over 180 service provider networks throughout North America. More information about Calix can be found at www.calix.com.

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; 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; general stock market volatility; 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; any undetected product defects, errors or failures; 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.

Use of the terms "partner" and "partnership" does not imply a legal partnership between Nortel and any other party.

For additional information contact:
Bo Gowan
Nortel
972-685-8278
bogowan@nortel.com

Jeannette Bitz
Calix
510-748-8200
jbitz@engagepr.com