TORONTO - Nortel Networks Corporation [NYSE/TSE: NT] announced completion of the acquisition of EPiCON, Inc., a privately held company based in Chelmsford, Mass.

EPiCON provides an innovative software platform that enables Application Service Providers (ASPs) to deliver and manage applications as services over the Internet. With EPiCON's software, service providers can remotely manage the full life cycle of desktop applications.

As a result of the acquisition, approximately 4.26 million Nortel Networks common shares were issued in exchange for all of the issued and outstanding shares of EPiCON common stock and Series A and Series B preferred stock, and approximately 1.05 million additional Nortel Networks common shares were reserved for issuance upon the exercise of outstanding EPiCON options that have been assumed by Nortel Networks. Nortel Networks Inc., an indirect subsidiary of Nortel Networks Corporation and a former holder of EPiCON Series C preferred stock, will continue to be a holder of EPiCON preferred stock. The acquisition was effected by the merger of a wholly owned subsidiary of Nortel Networks Corporation with and into EPiCON.

Nortel Networks is a global Internet and communications leader with capabilities spanning Optical, Wireless, Local Internet and eBusiness. 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, promising 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 make acquisitions and/or 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; the impact of consolidations in the telecommunications industry, the uncertainties of the Internet; stock market volatility; the ability of Nortel Networks to recruit and retain qualified employees; and the impact of increased provision of customer financing by Nortel Networks. 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.

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