Promatory's DSL solutions will accelerate Nortel Networks' leadership in high-speed Internet access by surpassing simple connectivity and bringing a new generation of intelligent, high-performance Internet services to the first mile.

"The race to add value to broadband Internet access is heating up," said Steve Schilling, president, Access Networks, Nortel Networks. "Service providers who can build a profitable business model by delivering high-performance Internet services to the world's homes and businesses will leave their competition in the dust. The addition of Promatory's next generation DSL platform extends Nortel Networks' lead in end-to-end, high-speed on-ramps to the high-performance Optical Internet."

As a result of the merger, Promatory, which has been renamed Nortel Networks Broadband Access Inc., became a wholly owned subsidiary of Nortel Networks. Each outstanding share of Promatory preferred stock and common stock was converted into a right to receive 0.2156 Nortel Networks common shares, for a total of approximately 6.15 million Nortel Networks common shares.

Approximately 128,000 Nortel Networks common shares were reserved for issuance in respect of Promatory options assumed by Nortel Networks. In addition, up to approximately US$72.9 in Nortel Networks common shares may be issued to former Promatory shareholders upon Promatory achieving certain business objectives.

Promatory's operations will remain in Fremont, California. Promatory president Roger Dorf will continue to lead Nortel Networks Broadband Access, reporting to Don Richmond, vice-president and general manager, Access Solutions, Nortel Networks.

Nortel Networks is a global leader in telephony, data, eBusiness, and wireless solutions for the Internet. The Company had 1999 U.S. GAAP revenues of US$21.3 billion and serves carrier, service provider and enterprise customers globally. Today, Nortel Networks is creating a high-performance Internet that is more reliable and faster than ever before. It is redefining the economics and quality of networking and the Internet through Unified Networks* that promise a new era of collaboration, communications and commerce. Visit us at www.nortelnetworks.com.

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 impact of price and product competition; the dependence on new product development; the impact of rapid technological and market change; the ability of Nortel Networks to integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; unanticipated impact of Year 2000 issues; and the impact of consolidations in the telecommunications industry. For additional information with respect to certain of these and other factors, see the reports filed by Nortel Networks with the United States Securities and Exchange Commission. Nortel Networks disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.