Nortel Selects Ericsson as Successful Bidder For CDMA Business and LTE Access Assets

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Nortel Selects Ericsson as Successful Bidder For CDMA Business and LTE Access Assets Nortel Selects Ericsson as Successful Bidder For CDMA Business and LTE Access AssetsNortel Selects Ericsson as Successful Bidder For CDMA Business and LTE Access Assets

25 July 2009

TORONTO - Nortel* Networks Corporation [OTC: NRTLQ] announced today that it, its principal operating subsidiary Nortel Networks Limited, and certain of its other subsidiaries including Nortel Networks Inc., have concluded a successful auction of substantially all of Nortel's CDMA Business and LTE Access assets. Telefonaktiebolaget LM Ericsson ("Ericsson") has emerged as the winning bidder with a purchase price of US$1.13 billion. The bid is subject to court approvals in the U.S. and Canada as well as regulatory and other customary closing conditions and certain post-closing purchase price adjustments.

If approved by the courts, Ericsson will purchase Nortel's CDMA business which is the second largest supplier of CDMA infrastructure in the world, and substantially all of Nortel's LTE Access assets giving it a strong technology position in next generation wireless networks. Also as part of this agreement, a minimum of 2,500 Nortel employees supporting the CDMA and LTE Access business will receive offers of employment from Ericsson.

Commenting on the announcement, Nortel President and Chief Executive Officer, Mike Zafirovski said:

"The anticipated sale of our CDMA business and LTE Access assets to Ericsson for $1.13 billion represents a very positive prospect for our customers who will be able to continue their relationships with a long term partner; for employees who will have new opportunities at Ericsson and for many of our other stakeholders. I want to especially thank our customers for their tremendous support during the process, which contributed to such a positive outcome."

"Nortel remains focused on finding the right buyers for our other businesses while continuing to maintain excellent customer service levels. We are determined to maximize value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible. With today's agreement and through the anticipated sales of the Company's other businesses, Nortel will leave its mark on the industry for decades to come."

Commenting on the sale, Richard Lowe, President of Carrier Networks at Nortel, said:

"The outcome of today's auction underscores the value the industry places on Nortel's CDMA business and LTE Access assets, which include a strong customer base and world-class operations. Nortel's extremely talented and committed employees have been an integral part of our success in wireless and we are very pleased that so many of them will have the opportunity to continue their innovative work with Ericsson."

Carl-Henric Svanberg, President and CEO of Ericsson said:

"The agreement between Nortel and Ericsson brings together leading-edge wireless innovation from two of the world's top telecommunications suppliers. We at Ericsson look forward to integrating Nortel's products and talented employees into our business and realizing the full potential of our combined strengths. Ericsson is committed to meeting the needs of our new CDMA customers today and bringing the next generation of mobile broadband to the world with LTE."

While today's auction is a significant step in the overall sale process, it is not the final step. Nortel will work diligently with Ericsson to close the sale later this year. Nortel will seek Canadian and U.S. court approvals of the proposed sale agreement at a joint hearing on July 28, 2009.

As previously announced in the Company's June 19 and July 20, 2009 press releases, the Company does not expect that its common shareholders or the preferred shareholders of Nortel Networks Limited will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.

Media and Analyst Call: Representatives from Nortel and Ericsson will hold a conference call for media and analysts on Monday, July 27, 2009 at 10 am EDT. Information on how to join that call will be available at http://www.nortel.com/corporate/investor/events/072709/index.html on Monday morning.

Nortel

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