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March 18, 1998

TORONTO – Nortel (Northern Telecom) today announced the execution of a definitive agreement to acquire Aptis Communications, Inc., a Massachusetts-based, remote-access data networking start-up company, for approximately $US 290 million in Nortel common stock and cash. Aptis is an industry leader in the development of carrier-class access switches, including the CVX 1800*, for network service providers, carriers and Internet service providers (ISPs).

With this acquisition, Nortel drives toward a leadership position in the access and virtual private networks (VPN) arena and demonstrates its commitment to build The New Internet* — a faster, more reliable, more profitable Internet. Nortel is now uniquely positioned to enable ISPs and carriers — who need products with scaleability, performance, quality of service and reliability— to keep pace with the expanding Internet market.

"Aptis’ products will deliver the attributes that will enable Nortel to make good on the promise of delivering easy access to Webtone," said Clarence Chandran, president, Public Carrier Networks, Nortel.

"With the integration of the CVX1800 into our network solutions, Nortel will be in a position to deliver integrated voice and data on a robust and secure IP network," said Glenn Falcao, vice-president and general manager, Nortel Public Data Networks.

The CVX 1800 will be an important part of Nortel’s just@sk Multi-Service Access strategy. Nortel plans to deliver more capability to the product with the addition of DSL, SONET and SS7 interfaces, network intelligence and network management capabilities. The product will be integrated into Nortel’s Internet Thruway* and Multi-Megabit network solutions, already in service with carriers and ISPs across the U.S.

Nortel’s just@sk Multi-Service Access strategy will provide an access platform for carriers and ISPs that will deliver traditional narrowband services with migration to more advanced broadband access technologies. This will enable carriers and ISPs to have the flexibility to rapidly build-out their networks to meet the breadth of consumer and business service demands, ranging from traditional voice services to the most sophisticated broadband applications.

"Nortel has clearly articulated a vision for the evolution of The New Internet that really excites us," said Paul Gustafson, Aptis president and CEO. "This is a dynamic time in a market that is expected to grow dramatically in size over the next year. The combination of Nortel and Aptis can deliver world-class value to ISPs and carrier networks."

Chris Burke, Director of Networks, Operations and Engineering at Energis said, "We are pleased to be one of the first customers who will benefit from the new merging of technologies. Energis’ networks must be fast, reliable and fault-tolerant. This new technology will add real value to our traffic-handling capabilities. For example, it can handle more than 6,000 modems at once. This is at least three times higher than anything else on the market. This is truly carrier class." The CVX 1800, currently in trials with three leading ISPs, has the highest modem density and the highest leased-line density, and is the only access switch designed to fully support multiple services including dial-up, leased lines and high-speed access. Aptis’ access switch architecture positions Nortel to deliver industry-leading, carrier-class access solutions.

Nortel intends to strengthen its presence in the Boston area with the development of industry-leading Internet access networks for its customers centered on the excellence of Aptis personnel.

Aptis will continue to operate as a separate business to enable Nortel and Aptis development teams to work effectively together while preserving Aptis’ entrepreneurial spirit. Paul Gustafson will remain president of Aptis and will also become a Nortel vice-president and general manager.

Under the acquisition agreement, a wholly-owned subsidiary of Northern Telecom Limited will merge with Aptis and the Aptis security holders will become entitled to receive Nortel common shares and/or cash. A portion of the purchase price is contingent upon the achievement of certain milestone events. The transaction is expected to close in the second quarter of 1998 and is subject to certain conditions, including compliance with the Hart-Scott-Rodino Anti-Trust Improvement Act, and certain other regulatory filings.

Aptis Communications, Inc., based in Chelmsford, Mass., is a leading provider of carrier-class access switches to network service providers, carriers and Internet service providers. The Aptis CVX 1800 will set the standard for carrier-class solutions that enable service providers to acquire and retain customers, reduce operations costs and deploy new services. Aptis was formed in January 1997 and employs approximately 50 people.

Nortel works with customers in more than 150 countries to design, build and integrate their communications products and advanced digital networks. Customers include public and private institutions; Internet service providers; local, long-distance, cellular mobile and PCS communications companies; cable television companies; and utilities.

Nortel had 1997 revenues of $US 15.5 billion and has approximately 73,000 employees worldwide.

* CVX 1800 is a trademark of Aptis Communications, Inc.

* The New Internet and Internet Thruway are trademarks of Northern Telecom.

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