Nortel Selects KPMG

TORONTO -- Nortel(*) (NYSE/TSX: NT) announced today that its Board of Directors has selected KPMG LLP as the Company's independent auditor commencing with fiscal year 2007. This selection concludes a thorough evaluation which the Company conducted as part of its corporate renewal process.

"Nortel is committed to building a great company founded on world-class corporate governance. As such, we conducted a rigorous selection process in search of an independent auditor with the optimal skills mix to match our current business requirements," said Peter Currie, executive vice president and chief financial officer, Nortel. "We found that KPMG has the expertise to help us cement a leading-edge corporate governance practice."

The appointment of KPMG as independent auditor is subject to the approval of the Company's shareholders at its next annual shareholder meeting.

Deloitte & Touche LLP is the Company's current independent auditor. The intended change in independent auditor does not result from any disagreement or dissatisfaction between Nortel and Deloitte.

"Nortel has been pleased with the service of Deloitte & Touche and, in particular, with the close collaboration provided in recent years. Deloitte helped Nortel overcome significant challenges to ensure that our financial reporting is accurate and up-to-date. We thank them for their service and look forward to continued work with them in other capacities going forward," said Currie.

Nortel Networks Ltd.