Bell Canada and Nortel Deliver Advanced Broadband Services and Applications to Northern Ontario Community; Next-Generation Wireless Solutions to Enhance Socio-Economic Growth in Chapleau

"What began as a vision -- a critical need to create an economicrecovery plan for our community -- is now a reality," said ChapleauMayor Earle Freeborn. "Broadband access, including one of the firstrural wireless mesh networks in Canada, will enable Chapleau toconnect, and compete, with other communities throughout the world,positioning us as a centre for innovation and change."

As part of this technology showcase, Chapleau will benefit fromnext generation wireless mesh, optical, multimedia communications andenterprise solutions using an upgraded optical network. Bell Canadaand Nortel have also opened the Chapleau Innovation Centre, whereresidents can access and learn about new technologies. Through theCentre they can also connect virtually with the Bell-Nortel InnovationCentre in Ottawa and the leading-edge technologies and expertise beingdeveloped there. The Chapleau Community Portal -- www.chapleau.ca --now provides a virtual meeting place for the community and access tothe global marketplace.

"Project Chapleau is not just about deploying technology, it isabout learning from this community and about looking at new models forthe provision of healthcare, education and commerce," said MichaelSabia, President and CEO of BCE and CEO of Bell Canada. "Access to newresources and services enables Chapleau's residents and businesses toparticipate in and build a broader concept of community."

Over the next 14 months, Bell Canada and Nortel will work withleading researchers from Laurentian University, the University ofToronto and others to study the impact of broadband technologies andapplications on the community. Project Chapleau is working with schoolboards and teachers in the town to broaden their curriculum throughleading edge applications and online educational initiatives.

"By working with the schools, we hope to bring the world toChapleau so that students and teachers can pull educational resourcesfrom the Internet and collaborate with their peers and colleagues inother remote communities, cities and even other countries," said BillOwens, vice chairman and chief executive officer, Nortel. "We willwork with researchers to better understand how technology can changethe way children learn and to study the impact on province-wideprograms such as math and literacy."

The delivery of health services to the area is expected to beenhanced with better collaborative tools for health practitioners andapplications in disease management, with a particular focus in thearea of diabetes monitoring.

Chapleau is a Northern Ontario community of approximately 3,000people and lies about 320 kilometers northeast of Sault Ste. Marie.The community is the gateway to the world's largest nature preserve --the 700,000-hectare Chapleau Crown Game Preserve.

For more information please visit www.chapleau.ca.

About Bell Canada

Bell Canada, Canada's national leader in communications, providesconnectivity to residential and business customers through wired andwireless voice and data communications, local and long distance phoneservices, high speed and wireless Internet access, IP-broadbandservices, e-business solutions and satellite television services. BellCanada is wholly owned by BCE Inc. For more information please visitwww.bell.ca.

About Nortel

Nortel is a recognized leader in delivering communicationscapabilities that enhance the human experience, ignite and powerglobal commerce, and secure and protect the world's most criticalinformation. Serving both service provider and enterprise customers,Nortel delivers innovative technology solutions encompassingend-to-end broadband, Voice over IP, multimedia services andapplications, and wireless broadband designed to help people solve theworld's greatest challenges. Nortel does business in more than 150countries. For more information, visit Nortel on the Web atwww.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain information included in this press release isforward-looking and is subject to important risks and uncertainties.The results or events predicted in these statements may differmaterially from actual results or events. Factors which could causeresults or events to differ from current expectations include, amongother things: the outcome of regulatory and criminal investigationsand civil litigation actions related to Nortel's restatements and theimpact any resulting legal judgments, settlements, penalties andexpenses could have on Nortel's results of operations, financialcondition and liquidity, and any related potential dilution ofNortel's common shares; the findings of Nortel's independent reviewand implementation of recommended remedial measures; the outcome ofthe ongoing independent review with respect to revenues for specificidentified transactions, which review will have a particular emphasison the underlying conduct that led to the initial recognition of theserevenues; the restatement or revisions of Nortel's previouslyannounced or filed financial results and resulting negative publicity;the existence of material weaknesses in Nortel's internal control overfinancial reporting and the conclusion of Nortel's management andindependent auditor that Nortel's internal control over financialreporting is ineffective, which could continue to impact Nortel'sability to report its results of operations and financial conditionaccurately and in a timely manner; the impact of Nortel's and NNL'sfailure to timely file their financial statements and related periodicreports, including Nortel's inability to access its shelf registrationstatement filed with the United States Securities and ExchangeCommission (SEC); the impact of management changes, including thetermination for cause of Nortel's former CEO, CFO and Controller inApril 2004; the sufficiency of Nortel's restructuring activities,including the work plan announced on August 19, 2004 as updated onSeptember 30, 2004 and December 14, 2004, including the potential forhigher actual costs to be incurred in connection with restructuringactions compared to the estimated costs of such actions; cautious orreduced spending by Nortel's customers; increased consolidation amongNortel's customers and the loss of customers in certain markets;fluctuations in Nortel's operating results and general industry,economic and market conditions and growth rates; fluctuations inNortel's cash flow, level of outstanding debt and current debtratings; Nortel's monitoring of the capital markets for opportunitiesto improve its capital structure and financial flexibility; Nortel'sability to recruit and retain qualified employees; the use of cashcollateral to support Nortel's normal course business activities; thedependence on Nortel's subsidiaries for funding; the impact ofNortel's defined benefit plans and deferred tax assets on results ofoperations and Nortel's cash flow; the adverse resolution of classactions, litigation in the ordinary course of business, intellectualproperty disputes and similar matters; Nortel's dependence on newproduct development and its ability to predict market demand forparticular products; Nortel's ability to integrate the operations andtechnologies of acquired businesses in an effective manner; the impactof rapid technological and market change; the impact of price andproduct competition; barriers to international growth and globaleconomic conditions, particularly in emerging markets and includinginterest rate and currency exchange rate fluctuations; the impact ofrationalization and consolidation in the telecommunications industry;changes in regulation of the Internet; the impact of the credit risksof Nortel's customers and the impact of customer financing andcommitments; general stock market volatility; negative developmentsassociated with Nortel's supply contracts and contract manufacturingagreements, including as a result of using a sole supplier for a keycomponent of certain optical networks solutions; the impact ofNortel's supply and outsourcing contracts that contain delivery andinstallation provisions, which, if not met, could result in thepayment of substantial penalties or liquidated damages; any undetectedproduct defects, errors or failures; the future success of Nortel'sstrategic alliances; and certain restrictions on how Nortel and itspresident and chief executive officer conduct business. For additionalinformation with respect to certain of these and other factors, seethe most recent Annual Report on Form 10-K and Quarterly Report onForm 10-Q filed by Nortel with the SEC. Unless otherwise required byapplicable securities laws, Nortel disclaims any intention orobligation to update or revise any forward-looking statements, whetheras a result of new information, future events or otherwise.