Nortel Completes Sale of Carrier VoIP and Application Solutions Business to GENBAND

May 28, 2010

TORONTO - Nortel* Networks Corporation [OTC: NRTLQ] today announced that, it, its principal operating subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), have completed the sale of substantially all of the global assets of Nortel's Carrier VoIP and Application Solutions (CVAS) business to GENBAND US LCC. (GENBAND) for a purchase price of US$282 million, less balance sheet and other adjustments of approximately US$100 million for a net purchase price of approximately US$182 million, which is subject to post-close working capital adjustments

"Today's announcement represents another successful milestone while preserving Nortel's Carrier VoIP technology innovation and base of highly skilled employees," said George Riedel, Chief Strategy Officer and President, Nortel. "The sale of our CVAS business to GENBAND enables our global service provider customers to continue to benefit from Nortel's industry-leading carrier VoIP and telephony expertise and long-standing track record in transitioning TDM networks to VoIP. We wish our transferring employees well, knowing that they are taking their considerable expertise to GENBAND."

As previously announced, Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.

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