CAIRO, Egypt - Nortel Networks* [NYSE/TSE: NT] has launched Nortel Networks Egypt at a ceremony with Dr Ahmed Nazif, Egyptian Minister of Communications and Information. The newly formed company plans to recruit more than 70 people, implement a large investment program, and become a central hub in the development of the Internet business in Egypt, the Middle East and North Africa.

"We're investing heavily and leveraging the global resources of Nortel Networks to bring a new, high-performance Internet to Egypt," said Tim Watkins, president, International Markets, Nortel Networks. "The launch of Nortel Networks Egypt is an important step for us, allowing us to further strengthen our presence in Egypt and to build new relationships with key players in the region."

Nortel Networks is establishing Cairo as a regional business hub supporting the phenomenal growth of the telecommunications sector in the Middle East and North Africa region. Nortel Networks will recruit locally, including sales and customer care professionals from both technical and commercial disciplines, and will expand to meet demand as the level of business continues to grow in the region.

"The investment in Egypt by Nortel Networks is very important for the company and brings huge potential benefits to the Middle Eastern region," said Magdy Hussein, country manager, Nortel Networks Egypt."We will recruit a highly motivated and talented team to help our customers compete more effectively in the global marketplace and to fully exploit the benefits of the Internet."

Nortel Networks is building on an already successful relationship with Telecom Egypt, which plans to deliver high-performance Internet solutions to businesses and residential customers in Egypt. Nortel Networks is currently implementing a significant public switching voice network with 22 digital switches, and is working to deliver a series of wireless, optical and data solutions.

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 and the Globemark are trademarks of Nortel Networks.