##### 



EXHIBIT 12
 NORTEL NETWORKS LIMITED
Computation of Ratio of Earnings from Continuing Operations to Fixed Charges
 Threemonths ended
    
    
    Years ended December 31,(millions of U.S. dollars)
    

March 31, 2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003As restated
    
    
    As restated
    
    
    As restated
    
    
    As restatedEarnings (loss) from continuing operations
before income taxes as reported in the
consolidated statements of operations
    
    
    (90
    )
    
    
    19
    
    
    
    (129
    )
    
    
    (174
    )
    
    
    241Add:Minority interest
    
    
    12
    
    
    
    21
    
    
    
    12
    
    
    
    11
    
    
    
    24Equity in net loss of associated companies
    
    
    0
    
    
    
    2
    
    
    
    (3
    )
    
    
    0
    
    
    
    36Earnings (loss) from continuing operations
before minority interest, equity in net loss of
associated companies and income taxes
    
    
    (78
    )
    
    
    42
    
    
    
    (120
    )
    
    
    (163
    )
    
    
    301Add:Fixed charges
    
    
    85
    
    
    
    276
    
    
    
    191
    
    
    
    181
    
    
    
    212Amortization of capitalized interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Interest expense of finance subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unconsolidated subs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Distributed income from equity investees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Subtract:Interest capitalized
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Preference security dividend requirements
of consolidated subsidiaries without fixed
charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Minority interest in pre-tax of subsidiaries
without fixed charges
    
    
    (12
    )
    
    
    (21
    )
    
    
    (12
    )
    
    
    (11
    )
    
    
    (24
    )Income (loss) as adjusted
    
    
    (5
    )
    
    
    297
    
    
    
    59
    
    
    
    7
    
    
    
    487Fixed charges:Interest expense   Long-term debt
    
    
    64
    
    
    
    187
    
    
    
    124
    
    
    
    108
    
    
    
    95   Other
    
    
    5
    
    
    
    22
    
    
    
    6
    
    
    
    8
    
    
    
    26Interest expense of finance subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unconsolidated subs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1/3 of rental expense on operating leases
deemed to be representative of interest
expense
    
    
    14
    
    
    
    65
    
    
    
    58
    
    
    
    59
    
    
    
    86Preference security dividend requirements of
consolidated subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortized premiums, discounts and
capitalized expenses related to
indebtedness
    
    
    2
    
    
    
    2
    
    
    
    3
    
    
    
    6
    
    
    
    585
    
    
    
    276
    
    
    
    191
    
    
    
    181
    
    
    
    212Ratio of earnings from continuing operations
to fixed charges
    
    
    *
    
    
    
    1.1
    
    
    
    *
    
    
    
    *
    
    
    
    2.3
 
 *
    
    The earnings of Nortel Networks Limited were inadequate to
cover fixed charges for the three months ended March 31, 2007 by
$90 and for the years
ended December 31, 2005 and 2004, by $132, and $174, respectively.