With the acquisition of Architel, Nortel Networks will expand its industry-leading Preside* portfolio to become the key enabler of next-generation Internet services promised by the Internet. Service providers will be able to deliver value-added Internet services to businesses and consumers with greater speed, quality, and reliability.

"Today's acquisition will provide us with first mover advantage in the market for the critical software and service-enabling solutions needed to create and run the high performance Internet, " said Steve Nicolle, vice president of Service Ware Solutions, Nortel Networks. "Preside and Architel represent a market making combination that will enable service providers to leverage opportunities afforded by the high performance Internet faster. We will move to dramatically reduce their time-to-revenue and time-to-profit."

Preside is a key element of the high-performance Internet, providing a critical foundation for the coming tidal wave of eBusiness and other Internet applications. Preside will enable applications like virtual private networks (VPNs) or eBusiness websites to work seamlessly with any connection medium, optical, cable, wireless or high-speed Digital Subscriber Link (DSL) service allowing service providers to offer a one-stop shop in delivering bundled services to businesses and consumers. Businesses and consumers will be able to overcome the cost, complexities and delays of implementing these leading-edge high-speed Internet services, while service providers boost their revenue opportunities dramatically.

Architel's software will become a key component of Preside. It will automate the service provisioning process, enabling service providers to provision and activate services for individual customers in minutes, instead of the weeks or months it takes in many networks. Architel's solutions maximize the return of new value-added services such as high-speed DSL service, voice over DSL, hosted applications, multimedia applications, and virtual private networks.

Architel's technology complements Nortel Networks existing Preside portfolio and recently acquired customer care solutions from Clarify*. Together, these market-leading software systems will provide a fast, responsive and seamless integrated bridge between the customers, the services they want to use and the network that underlies the Internet. This creates opportunities for service providers and their customers to profit from eBusiness.

Architel was founded in 1984 and is headquartered in Toronto, Canada. It has approximately 400 employees and a global business, with customers in the Americas, Europe, and Asia. It has a history of delivering value to service providers, both traditional and emerging, and in networks that include voice and data. Its service fulfillment software solutions have been implemented in some of the world's most demanding wireline, wireless and data/IP environments worldwide. Service providers including Cable & Wireless, MCI WorldCom, British Telecom, GTE, and McLeodUSA use Architel's services to achieve greater quality, performance, and speed-to-revenue.

"Nortel Networks is a great strategic fit for Architel," said Stuart Griffith, president and CEO of Architel. "Architel is very focused on building next-generation service delivery solutions for the largest carrier-grade IP networks, and we see Nortel Networks global reach, marketing and sales power as the best way to leverage those capabilities. "

Nortel Networks will exchange 0.21 of a common share for each Architel share on a fully-diluted basis, resulting in Nortel Networks issuing approximately 3.63 million common shares on a fully-diluted basis. At closing, however, if the value of Nortel Networks common shares is below US$83.81, Nortel Networks will pay US$17.60 in Nortel Networks common shares for each share of Architel, on a fully-diluted basis. If the value of Nortel Networks common shares is above US$125.71, Nortel Networks will pay US$26.40 in Nortel Networks common shares for each Architel share, on a fully-diluted basis.

The transaction, which is expected to close in early third quarter of 2000, is subject to customary regulatory approvals, court approval, and approval by Architel's shareholders. It is expected to be neutral to Nortel Networks earnings per share in calendar year 2000 and slightly accretive in calendar year 2001 (excluding acquisition-related charges). The board of directors of both companies have approved the transaction. If the transaction fails to proceed in certain circumstances, Nortel Networks will be entitled to receive either a US$12 million termination fee or the benefits of an option to acquire a 19.9% common share interest in Architel.

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.

Architel develops, markets and supports advanced Operations Support Systems used in the global communications industry. Architel is a recognized leader in providing next generation provisioning solutions with Carrier Grade reliability. Architel's provisioning solutions have been installed in some of the world's most demanding wireline, wireless and data/IP environments. Architel's Carrier Grade products are comprised of its flagship product ASAP*, for service activation, as well as OMS* for order management, Objectel* for network inventory and InterGate*, the interconnection gateway solution. For further information on Architel Systems Corporation, please call the Investor Relations line at (416) 674-4086 or visit Architel's World Wide Web site at http://www.Architel.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 and by Architel Systems Corporation with the United States Securities and Exchange Commission or Canadian securities regulatory authority. Nortel Networks and Architel each disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.