Nortel to Take Equity Stake in Sasken Communication Technologies

    Business Editors/Technology Writers

    MUMBAI, India--(BUSINESS WIRE)--April 7, 2005--Nortel (NYSE: NT) (TSX: NT) has invested US$10 million in Sasken Communication Technologies Limited for an undisclosed stake in Sasken's fully diluted equity, the companies announced today.
    Nortel and Sasken have also signed an amendment to an existing services agreement under which they will continue to work together to develop new software and deploy Nortel networking solutions.
    Sasken, a pioneer in telecom research and development (R&D) outsourcing, has been a key supplier to Nortel since 1991, and is currently focused on supporting Nortel's GSM (Global System for Mobile Communications) digital wireless and enterprise communications solutions. Sasken will also play a major role in training, technical support and other engineering services in Nortel projects in India.
    This investment strengthens Nortel's strategic relationship with Sasken and aligns with Nortel's objective to bring greater capabilities to customers in the critical emerging markets of India and the Asia Pacific region.
    Sasken plans to use this investment to fuel its growth through acquisitions.
    "Nortel has been an important customer of Sasken for the past 15 years," said Rajiv Mody, chairman and chief executive officer, Sasken Communication Technologies Limited. "This investment is a re-affirmation of Nortel's long and close relationship with Sasken. We believe that this investment and the expanded services agreement are key milestones in achieving our vision of becoming India's leading telecommunication solutions provider."
    "India is an important market for Nortel," said Brian McFadden, chief research officer, Nortel, "and Sasken has played a key role in Nortel's R&D and market success. Strengthening our relationship with Sasken is an investment in our future, and provides Nortel with a stronger foothold to serve our customers in India and the Asia Pacific region."
    "This is another important investment in strengthening our position as a leading player in India," said John Giamatteo, president, Asia Pacific, Nortel. "A close relationship with a leading local supplier like Sasken in one of the world's fastest growing markets will further enhance Nortel's ability to stay competitive in the Indian market and beyond."

    About Sasken

    Sasken, a pioneer in telecom R&D outsourcing, offers a unique combination of complementary IP software components, research and development consultancy and software services to leading semiconductor manufacturers, network equipment companies, and global wireless handset developers. Established in 1989, Sasken employs over 2,000 staff, operating from state-of-the-art research and development centers in Bangalore and Pune, India and has offices in Canada, China, Germany, Japan, Sweden, France, the UK and the United States. For more information, visit Sasken on the Web at www.sasken.com.

    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.

    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 outcome of regulatory and criminal investigations and civil litigation actions related to Nortel's restatements and the impact any resulting legal judgments, settlements, penalties and expenses could have on Nortel's results of operations, financial condition and liquidity; the findings of Nortel's independent review and implementation of recommended remedial measures; the outcome of the independent review with respect to revenues for specific identified transactions, which review will have a particular emphasis on the underlying conduct that led to the initial recognition of these revenues; the restatement or revisions of Nortel's previously announced or filed financial results and resulting negative publicity; the existence of material weaknesses in Nortel's internal controls over financial reporting; the impact of Nortel's and NNL's failure to timely file their financial statements and related periodic reports, including breach of its support facility and public debt obligations and Nortel's inability to access its shelf registration statement filed with the United States Securities and Exchange Commission ("SEC"); ongoing SEC reviews, which may result in changes to our public filings; the potential delisting or suspension of Nortel's and NNL's publicly traded securities; the impact of management changes, including the termination for cause of Nortel's former CEO, CFO and Controller in April 2004; the sufficiency of Nortel's restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions;
    cautious or reduced spending by Nortel's customers; fluctuations in Nortel's operating results and general industry, economic and market conditions and growth rates; fluctuations in Nortel's cash flow, level of outstanding debt and current debt ratings; Nortel's ability to recruit and retain qualified employees; the use of cash collateral to support Nortel's normal course business activities; the dependence on Nortel's subsidiaries for funding; the impact of Nortel's defined benefit plans and deferred tax assets on results of operations and Nortel's cash flow; the adverse resolution of class actions, litigation in the ordinary course of business, intellectual property disputes and similar matters; Nortel's dependence on new product development and its ability to predict market demand for particular products; Nortel's ability to integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization and consolidation in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel's customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date or early settlement, which is currently not available, of Nortel's forward purchase contracts; the impact of Nortel's supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; and the future success of Nortel's strategic alliances.
    For additional information with respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by Nortel with the SEC. 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.

    Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

--30--JC/na*

CONTACT: Nortel Media Contact: Sheetal Mehta, +91 22 5697 8761 email: smehta@nortel.com or Jay Barta, 972-685-2381 email: jbarta@nortel.com or Investor Contact: 888-901-7286 905-863-6049 email: investor@nortel.com

KEYWORD: TEXAS INDIA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: TELECOMMUNICATIONS SOFTWARE NETWORKING HARDWARE COMPUTERS/ELECTRONICS PRODUCT SOURCE: Nortel

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