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Nortel Acquires Tasman Networks to Strengthen End-to-End Convergence Solutions

Toronto, December 27, 2005 - Nortel* [NYSE/TSX: NT] has enhanced its ability to deliver end-to-end converged enterprise networks with the agreement to acquire Tasman Networks, an established networking company that provides a portfolio of secure, high-performance enterprise routers. Under the terms of the agreement, Nortel will pay U.S. $99.5 million in cash for Tasman Networks. The acquisition is anticipated to close in the first quarter of 2006 and is subject to customary closing conditions.

"With the acquisition of  Tasman Networks, Nortel will strengthen its position as an innovator in providing resilient end-to-end converged, secure IP telephony and multimedia networks," said Steve Slattery, president, Enterprise Solutions and Packet Networks, Nortel. "We anticipate that the Tasman products will complement our enterprise infrastructure solutions and further our ability to provide seamless, feature-rich networks that support critical real-time applications - including voice, video, and streaming multimedia applications."

San Jose , California based Tasman Networks founded in 1997, delivers high-performance, wide-area network IP routers that are designed to offer simplified deployment and provide a more cost-effective investment for companies. They are planned to augment Nortel's convergence solutions for data and IP multimedia customers and are planned to be marketed as part of Nortel's  Secure Router line.

This portfolio, aimed at small to medium-sized branch office deployments, is designed to provide full routing and multicast services; and is uniquely capable of running numerous services such as voice, VPN, firewall, and quality of service simultaneously with wire-speed performance. This capability is crucial to converging network services onto one platform and is designed to provide full bandwidth from the network consistently.

Nortel is the only company to have deployed more than 50 million enterprise telephony lines in addition to 50 million Ethernet ports, demonstrating the company's leadership in delivering converged network solutions. Nortel's IP multimedia solutions serve customers of all sizes in all industries around the world.

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. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. 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.