LONDON - Cable & Wireless has selected Nortel Networks* [NYSE/TSE: NT] for a network and outsourcing project, including implementation of a global voice over IP (Internet Protocol) platform, estimated to be worth US$1.4 billion over 10 years.

This project, which is subject to execution of definitive agreements and the employee consultation process, is expected to demonstrate Nortel Networks leadership in next generation networks. Nortel Networks will manage build out and operation of the Cable & Wireless voice over IP (VoIP) network through its Global Professional Services group. It will also be the largest implementation to date of Nortel Networks Succession* Solutions.

Nortel Networks will plan, design, implement and operate the Cable & Wireless VoIP backbone network, which will extend throughout Europe and North America.

Plans call for voice traffic to be migrated onto the new network over a three-year period, an important milestone in Cable & Wireless' planned transformation into a leading provider of IP and data services to business customers. Cable & Wireless is also expected to transfer employees managing its existing voice network to Nortel Networks.

"For a program of this scale and complexity, we needed a vendor we could rely on," said Mike McTighe, chief executive officer, Global Operations, Cable & Wireless.

"We discussed our requirements with a number of potential suppliers, but in the end it was clear that Nortel Networks was the right candidate," McTighe said. "A combination of excellence in voice over IP technology, systems integration and implementation, and network management made Nortel Networks the natural choice."

"Nortel Networks will enable Cable & Wireless to radically change its business model to capitalize on the Internet economy," said Clarence Chandran, chief operating officer, Nortel Networks.

"This is a landmark project for our Global Professional Services, and a validation of our leadership position with Succession Solutions in the next generation network marketplace," Chandran said. "We are providing our customers with the strategies, tactics and tools to harness the power of the Internet to enhance business performance."

The new Cable & Wireless network will be based on Nortel Networks Succession Solutions, including Succession Communication Server 2000, Succession Communication Server 3000 softswitch and Nortel Networks Passport* 15000 Packet Voice Gateway.

Succession Solutions include next generation, multi-service network solutions for established carriers and emerging service providers that enable them to deliver mission-critical voice, data and multimedia services over a single, converged, packet-based network.

Succession Solutions are based on the latest generation of open standards, and are currently being tested or used by carriers and service providers globally, including Telstra (Australia), BT Spain, France Telecom, Global Village Telecom (Brazil), AT&T and SBC.

Nortel Networks helps customers move from 'vision to value' with its Global Professional Services, providing consultancy, integration and management support. According to IDC, worldwide expenditure on network consulting and integration services will grow to more than US$33 billion in 2004, more than double the US$16 billion in 1999.

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.

*Nortel Networks, the Nortel Networks logo, the Globemark, Succession and Passport are trademarks of Nortel Networks.