Nortel Provides Status Update

Toronto, Canada (ots/PRNewswire) - Nortel Networks(x) Corporation
(NYSE: NT TSX:NT) and its principal operating subsidiary, Nortel
Networks Limited ("NNL"), today provided a status update pursuant to
the alternate information guidelines of the Ontario Securities
Commission. These guidelines contemplate that the Company and NNL
will normally provide bi-weekly updates on their affairs until such
time as they are current with their filing obligations under
Canadian securities laws.

Restatements

Change in Accounting Policy

The Company is continuing work on the current restatement of its
and NNL's historical financial results as first announced on March
10, 2006, which work is primarily focused on an accounting policy
change with respect to revenue for contracts with provisions for
multiple deliverables that was historically accounted for under the
percentage-of-completion methodology in accordance with American
Institute of Certified Public Accountants Statement of Position
81-1, "Accounting for Performance of Construction- Type and Certain
Production-Type Contracts" ("SOP 81-1"). Through the restatement and
on a prospective basis, these complex contractual arrangements will
be accounted for in accordance with Emerging Issues Task Force Issue
No. 00-21, "Revenue Arrangements with Multiple Deliverables" (" EITF
00-21"). EITF 00-21 requires an analysis of individual contract
deliverables such as hardware, software and/or services and their
fair value in order to determine the time pattern of revenue
recognition, in contrast to the percentage-of-completion estimation
methodology under SOP 81-1.

As a result of this continuing work, the Company expects that in
addition to the revenue adjustments identified in the March 10, 2006
press release, additional revenue recognized in prior periods will
be restated and deferred to future periods. The Company will be in a
position to determine the amounts of additional revenue deferral and
periods impacted upon completion of this work.

Filing of Financial Statements

The Company continues to expect to file its and NNL's annual
reports on Form 10-K for the year ended December 31, 2005 and their
corresponding filings under Canadian securities laws by April 30,
2006.

Annual Shareholders' Meeting

The board of directors of Nortel Networks Corporation called an
annual and special meeting of shareholders (the "Meeting") to be
held on June 29, 2006 in Toronto, Ontario. The board of directors
set the close of business on Wednesday, May 10, 2006 as the record
date for determining the shareholders of Nortel Networks Corporation
entitled to receive notice of the Meeting. Details of the location,
time and agenda for the Meeting will be included in Nortel Networks
Corporation's proxy circular and proxy statement.

The Company and NNL reported that there have been no material
developments in the matters reported in the March 10, 2006 press
release and their status update of March 23, 2006, except for the
Company's press release "Nortel Announces OSC Management Cease Trade
Order" dated March 27, 2006 and the matters described above.

The Company's and NNL's next bi-weekly status update is expected
to be released during the week of April 17, 2006.

About Nortel

Nortel is a recognized leader in delivering communications
capabilities that enhance the human experience, ignite and power
global commerce, and secure and protect the world's most critical
information. Our next- generation technologies, for both service
providers and enterprises, span access and core networks, support
multimedia and business-critical applications, and help eliminate
today's barriers to efficiency, speed and performance by simplifying
networks and connecting people with information. Nortel does
business in more than 150 countries. For more information, visit
Nortel on the Web at www.nortel.com. For the latest Nortel news,
visit www.nortel.com/news.

Certain statements in this press release may contain words such as
" could", "expects", "may", "anticipates", "believes", "intends",
"estimates ", "plans", "envisions", "seeks" and other similar
language and are considered forward- looking statements or
information under applicable securities legislation. These
statements are based on Nortel's current expectations, estimates,
forecasts and projections about the operating environment, economies
and markets in which Nortel operates. These statements are subject
to important assumptions, risks and uncertainties, which are
difficult to predict and the actual outcome may be materially
different. Although Nortel believes expectations reflected in such
forward- looking statements are reasonable based upon the assumptions
in this press release, they may prove to be inaccurate and
consequently Nortel's actual results could differ materially from
its expectations set out in this press release. Further, actual
results or events could differ materially from those contemplated in
forward-looking statements as a result of the following (i) risks
and uncertainties relating to Nortel's restatements and related
matters including: Nortel's recently announced restatement and two
previous restatements of its financial statements and related events
and that the previously filed financial statements of Nortel and NNL
and related audit reports should not be relied upon; the negative
impact on Nortel and NNL of their announced restatement and delay in
filing their financial statements and related periodic reports
causing them to breach their public debt indentures and obligations
under their credit facilities with the possibility that the holders
of their public debt or NNL's lenders would seek to accelerate the
maturity of that debt; and causing a breach of NNL's support
facility with EDC with the possibility that EDC would refuse to
issue additional support under the facility, terminate its
commitments under the facility or require NNL to cash collateralize
all existing support; legal judgments, fines, penalties or
settlements, or any substantial regulatory fines or other penalties
or sanctions, related to the ongoing regulatory and criminal
investigations of Nortel in the U.S. and Canada; any significant
pending civil litigation actions not encompassed by Nortel's
proposed class action settlement; any substantial cash payment
and/or significant dilution of Nortel's existing equity positions
resulting from the finalization and approval of its proposed class
action settlement, or if such proposed class action settlement is not
finalized, any larger settlements or awards of damages in respect of
such class actions; any unsuccessful remediation of Nortel's
material weaknesses in internal control over financial reporting
resulting in an inability to report Nortel's results of operations
and financial condition accurately and in a timely manner; the time
required to implement Nortel's remedial measures; Nortel's inability
to access, in its current form, its shelf registration filed with
the United States Securities and Exchange Commission (SEC), and
Nortel's below investment grade credit rating and any further
adverse effect on its credit rating due to Nortel's restatement of
its financial statements; any adverse affect on Nortel's business and
market price of its publicly traded securities arising from
continuing negative publicity related to Nortel's restatements;
Nortel's potential inability to attract or retain the personnel
necessary to achieve its business objectives; any breach by Nortel
of the continued listing requirements of the NYSE or TSX causing the
NYSE and/or the TSX to commence suspension or delisting procedures;
any default in Nortel's filing obligations extending beyond May 9,
2006, causing any Canadian securities regulatory authority to impose
an order to cease all trading in Nortel's securities within the
applicable jurisdiction or to impose such an order sooner if Nortel
fails to comply with the alternate information guidelines of such
regulatory authorities; (ii) risks and uncertainties relating to
Nortel's business including: yearly and quarterly fluctuations of
Nortel's operating results; reduced demand and pricing pressures for
its products due to global economic conditions, significant
competition, competitive pricing practice, cautious capital spending
by customers, increased industry consolidation, rapidly changing
technologies, evolving industry standards, frequent new product
introductions and short product life cycles , and other trends and
industry characteristics affecting the telecommunications industry;
any material and adverse affects on Nortel's performance if its
expectations regarding market demand for particular products prove
to be wrong or because of certain barriers in its efforts to expand
internationally; any reduction in Nortel's operating results and any
related volatility in its market price of its publicly traded
securities arising from any decline in its gross margin, or
fluctuations in foreign currency exchange rates; any negative
developments associated with Nortel's supply contract and contract
manufacturing agreements including as a result of using a sole
supplier for key optical networking solutions components, and any
defects or errors in Nortel's current or planned products; any
negative impact to Nortel of its failure to achieve its business
transformation objectives; restrictions on how Nortel and its
president and chief executive officer conduct its business arising
from a settlement with Motorola Inc.; additional valuation
allowances for all or a portion of its deferred tax assets; Nortel's
failure to protect its intellectual property rights, or any adverse
judgments or settlements arising out of disputes regarding
intellectual property; changes in regulation of the Internet and/or
other aspects of the industry; Nortel's failure to successfully
operate or integrate its strategic acquisitions, or failure to
consummate or succeed with its strategic alliances; any negative
affect of Nortel's failure to evolve adequately its financial and
managerial control and reporting systems and processes, manage and
grow its business, or create an effective risk management strategy;
and (iii) risks and uncertainties relating to Nortel's liquidity,
financing arrangements and capital including: the impact of Nortel's
recently announced restatement and two previous restatements of its
financial statements; any acceleration under their public debt
indentures and credit facilities, which may result in Nortel and NNL
being unable to meet their respective payment obligations; any
inability of Nortel to manage cash flow fluctuations to fund working
capital requirements or achieve its business objectives in a timely
manner or obtain additional sources of funding; high levels of debt,
limitations on Nortel capitalizing on business opportunities because
of credit facility covenants, or on obtaining additional secured
debt pursuant to the provisions of indentures governing certain of
Nortel's public debt issues and the provisions of its credit
facilities; any increase of restricted cash requirements for Nortel
if it is unable to secure alternative support for obligations
arising from certain normal course business activities, or any
inability of Nortel's subsidiaries to provide it with sufficient
funding; any negative affect to Nortel of the need to make larger
defined benefit plans contributions in the future or exposure to
customer credit risks or inability of customers to fulfill payment
obligations under customer financing arrangements; any negative
impact on Nortel's ability to make future acquisitions, raise
capital, issue debt and retain employees arising from stock price
volatility and further declines in Nortel's market price of its
publicly traded securities, or any future share consolidation
resulting in a lower total market capitalization or adverse affect on
the liquidity of Nortel's common shares. For additional information
with respect to certain of these and other factors, see Nortel's
securities filings with the SEC, which have not been updated to
reflect each of these risks and uncertainties and which include
financial information that Nortel announced on March 10, 2006 cannot
be relied upon. Unless otherwise required by applicable securities
laws, Nortel disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

(x) Nortel, the Nortel logo and the Globemark are trademarks of
Nortel Networks.

www.nortel.com

Rückfragehinweis:
For further information: Media - Patricia Vernon, +1-(905)-863-1035,
patricve@nortel.com; Investors - +1-(888)-901-7286,
+1-(905)-863-6049, investor@nortel.com

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