Exhibit 12



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|NORTEL NETWORKS LIMITED                                                                                                   | 
|Computation of Ratio of Earnings to Fixed Charges and Dividends                                                           | 
|                                                                                                                          | 
|                                                                                                                          |  |                    |  
|                                                                                                                          |  | Three              |   |  | Nine               |   |  | Years ended December 31, | 
|(millions of U.S. Dollars)                                                                                                |  | months ended       |   |  | months ended       |   |  | 2007                     |  | 2006 |   |  | 2005        |   |  | 2004        |   |  | 2003        |  
|                                                                                                                          |  | September 30, 2008 |   |  | September 30, 2008 |   |  |                          |  |      |   |  | As restated |   |  | As restated |   |  | As restated |  
|                                                                                                                          |  |                    |   |  |                    |   | 
|Earnings (loss) from operations before minority interest, equity in net earnings of associated companies and income taxes |  | (1,150             | ) |  | (1,130             | ) |  | 387                      |  | 42   |   |  | (120        | ) |  | (163        | ) |  | 301         |  
|                                                                                                                          |  |                    |   |  |                    |   | 
|Add:                                                                                                                      |  |                    |   |  |                    |   |  |                          |  |      |   |  |             |   |  |             |   |  |             |  
|Fixed charges                                                                                                             |  | 97                 |   |  | 265                |   |  | 396                      |  | 276  |   |  | 191         |   |  | 181         |   |  | 212         |  
|Amortization of capitalized interest                                                                                      |  |                   |   |  |                   |   |  |                         |  |     |   |  |            |   |  |            |   |  | (2          | )
|Pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges                |  |                   |   |  |                   |   |  |                         |  |     |   |  |            |   |  |            |   |  |            |  
|Distributed income from equity investees                                                                                  |  |                   |   |  |                   |   |  |                         |  |     |   |  |            |   |  |            |   |  |            |  
|                                                                                                                          |  |                    |   |  |                   |   |  |                          |  |      |   |  |             |   |  |             |   |  |             |  
|                                                                                                                          |  |                    |   |  |                    |   | 
|Subtract:                                                                                                                 |  |                    |   |  |                    |   |  |                          |  |      |   |  |             |   |  |             |   |  |             |  
|Interest capitalized                                                                                                      |  |                   |   |  |                   |   |  | 5                        |  |     |   |  |            |   |  |            |   |  |            |  
|Preference security dividend requirements of consolidated subsidiaries                                                    |  |                   |   |  |                   |   |  |                         |  |     |   |  |            |   |  |            |   |  |            |  
|Minority interest in pre-tax income of subsidiaries without fixed charges                                                 |  | 12                 |   |  | 125                |   |  | 73                       |  | 21   |   |  | 12          |   |  | 11          |   |  | 24          |  
|                                                                                                                          | 
|Income (loss) as adjusted                                                                                                 |  | (1,065             | ) |  | (990               | ) |  | 705                      |  | 297  |   |  | 59          |   |  | 7           |   |  | 487         |  
|                                                                                                                          | 
|                                                                                                                          |  |                    |   |  |                    |   | 
|Fixed charges:                                                                                                            |  |                    |   |  |                    |   |  |                          |  |      |   |  |             |   |  |             |   |  |             |  
|Interest expense                                                                                                          |  |                    |   |  |                    |   |  |                          |  |      |   |  |             |   |  |             |   |  |             |  
|- Long-term debt                                                                                                          |  | 72                 |   |  | 190                |   |  | 257                      |  | 187  |   |  | 124         |   |  | 108         |   |  | 95          |  
|- Other                                                                                                                   |  | 3                  |   |  | 12                 |   |  | 24                       |  | 22   |   |  | 6           |   |  | 8           |   |  | 26          |  
|1/3 of rental expense on operating leases deemed to be representative of interest expense                                 |  | 20                 |   |  | 57                 |   |  | 109                      |  | 65   |   |  | 58          |   |  | 59          |   |  | 86          |  
|Preference security dividend requirements of consolidated subsidiaries                                                    |  |                   |   |  |                   |   |  |                         |  |     |   |  |            |   |  |            |   |  |            |  
|Amortized premiums, discounts and capitalized expenses related to indebtedness                                            |  | 2                  |   |  | 6                  |   |  | 6                        |  | 2    |   |  | 3           |   |  | 6           |   |  | 5           |  
|                                                                                                                          | 
|Fixed charges                                                                                                             |  | 97                 |   |  | 265                |   |  | 396                      |  | 276  |   |  | 191         |   |  | 181         |   |  | 212         |  
|                                                                                                                          | 
|                                                                                                                          |  |                   |   |  |                    |   |  |                          |  |      |   |  |             |   |  |             |   |  |             |  
|Nortel Networks Limited preference security dividend                                                                      |  | 9                  |   |  | 32                 |   |  | 70                       |  | 63   |   |  | 43          |   |  | 37          |   |  | 42          |  
|                                                                                                                          | 
|Combined fixed charges and preference security dividend requirements                                                      |  | 97                 |   |  | 191                |   |  | 466                      |  | 339  |   |  | 234         |   |  | 218         |   |  | 254         |  
|                                                                                                                          | 
|Ratio of earnings to fixed charges                                                                                        |  | *                  |   |  | *                  |   |  | 1.8                      |  | 1.1  |   |  | *           |   |  | *           |   |  | 2.3         |  
|                                                                                                                          | 
|Ratio of earnings to combined fixed charges and preference security dividend requirements                                 |  | *                  | * |  | *                  | * |  | 1.5                      |  | *    | * |  | *           | * |  | *           | * |  | 1.9         |  
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|* | The earnings of Nortel Networks Limited were inadequate to cover fixed charges for the three and nine months ended September 30, 2008 by $1,162 and $1,255, respectively, and for the
years ended December 31, 2005 and 2004, by $132 and $174, respectively.
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|** | The earnings of Nortel Networks Limited were inadequate to cover combined fixed charges and preference security dividend requirements for the three and nine months ended September
30, 2008 by $1,1,62 and $1,255 and for the years ended December 31, 2006, 2005 and 2004, by $42, $175 and $211, respectively.
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