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Exhibit 99.1 News Release
    
    (NORTEL NETWORKS LOGO)www.nortelnetworks.comFOR IMMEDIATE RELEASE
    
    October 27, 2004For more information:Media:
    
    Investors:Tina Warren
    
    (888) 901-7286(905) 863-4702
    
    (905) 863-6049tinawarr@nortelnetworks.com
    
    investor@nortelnetworks.com
 Nortel Networks Provides Status Update TORONTO  Nortel Networks* Corporation [NYSE/TSX:NT] and its principal
operating subsidiary, Nortel Networks Limited (NNL), today provided a status
update pursuant to the alternative information guidelines of the Ontario
Securities Commission. These guidelines contemplate that the Company and NNL
will normally provide bi-weekly updates on their affairs until such time as
they are current with their filing obligations under Canadian securities laws. Status of Restatements and Audit Committee Independent Review, Filing of
Financial Statements and Third Quarter 2004 Results The Company and NNL continue to dedicate significant resources to the process
to complete their financial statements as soon as practicable. As previously
announced, the Company and NNL continue to work on the restatement of their
financial results for each fiscal quarter in 2003 and for the years 2002 and
2001, and the preparation of their financial statements for the year 2003 and
the first and second quarters of 2004. The independent review by the Nortel Networks Audit Committee is continuing and
nearing completion. The Audit Committees continuing objective is to arrive at
a full understanding of the facts and circumstances that gave rise to the
Companys and NNLs restatements before the financial statements are finalized
and filed. Despite the significant work completed to date, the Company and NNL will not be
in a position to file financial statements by the end of October 2004 as
previously announced. The Company now expects that it and NNL will file, in mid
November 2004, financial statements for the year 2003 and the first and second
quarters of 2004, and related periodic reports. This delay in our timeline for completing the restatement process was a very
difficult decision. Our first accountability is to unquestionable quality of
this restatement for our shareholders, customers and employees, said Bill
Owens, president and chief executive officer, Nortel Networks. I was not
satisfied given the enormous details and complexity involved that we would be
able to meet our October deadline. Although this delay is disappointing, we
have made great progress toward completion, have continued to devote massive
resources to the restatement effort and are confident that we are very close to
the end of this critical chapter. Seeing that closure is close at hand leads
us to be confident about moving forward with our business.




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Page 2 As a result of the delay mentioned above, the Company and NNL do not expect to
file financial statements for the third quarter of 2004, and related periodic
reports, by the required deadlines in November 2004 in compliance with certain
U.S. and Canadian securities regulations. The Company and NNL will therefore
each be filing with the United States Securities and Exchange Commission (the
SEC) a Form 12b-25 Notification of Late Filing relating to the delay in
filing their quarterly reports on Form 10-Q for the third quarter of 2004. The Company expects that it and NNL will announce limited preliminary unaudited
financial results for the third quarter of 2004 by the end of November 2004 and
file their financial statements and related periodic reports for the third
quarter of 2004 in mid December 2004. The Company expects that it and NNL will
file, as soon as practicable after the filing of the third quarter 2004
financial statements, any required amendments to periodic reports for prior
periods. The Companys expectation as to timing of events is subject to change.
Specifically, the completion of the Companys work and the related audits and
reviews of financial statements by the Companys and NNLs independent auditors
is dependent upon the timing of the completion and results of the independent
review being undertaken by the Nortel Networks Audit Committee. Based on the Companys work to date, and subject to the limitations described
below, the principal estimated impacts of the restatements and revisions
identified to date to the Companys results reflect the following:  
    
    Revenue adjustments identified to date reflect increases to previously announced annual revenues of approximately 7 percent
in 2001, 1 percent in 2002 and 3 percent in 2003. Revenue adjustments in 2003 and prior periods primarily relate to timing
issues (for example, revenue that should have been deferred to a later period or recognized in an earlier period);
    
    As previously announced, a reduction of approximately 50 percent in previously announced net earnings for 2003; these
amounts will largely be reported in prior periods, resulting in a reduction in previously reported net losses for such
periods including 2002 and 2001;
    
    Approximately two-thirds of the reduction in 2003 net earnings identified to date impacts the first half of 2003 (down from
three-quarters previously announced), with the remaining approximately one-third reduction impacting the second half of
2003;
    
    The net income reductions are expected to impact the Companys continuing operations and discontinued operations on an
approximately equal basis (compared to the previous estimate of a substantial impact to continuing operations); and
    
    As previously announced, no material impact to the Companys cash balance as at December 31, 2003. As previously indicated, the Companys work to date with respect to the
restatements and revisions and the principal estimated impacts mentioned above
are subject to a number of important limitations, including:  
    
    These principal impacts are estimated impacts which have been identified by the Company based on the work done to date and
are not projections of the final impacts. As such, these principal estimated impacts continue to be preliminary and subject
to change;
    
    The ongoing work of the Nortel Networks Audit Committee independent review;
    
    The ongoing work to be done by the Company related to the restatements and revisions;
    
    The previously disclosed material weaknesses in the Companys internal controls over financial reporting; and
    
    The review or audit of the Nortel Networks financial statements by the Companys independent auditors. Nortel Networks Limited The financial results of NNL are consolidated into the Companys results. NNLs
financial statements for the applicable periods will also be restated upon the
related restatements of the Companys financial statements. NNLs preferred
shares are publicly traded in Canada.




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Page 3 Update on Certain Potential Impacts Debt Securities As previously announced, as a result of the delay in the filing of the 2003
Form 10-K and Quarterly Reports on Form 10-Q for the first and second quarter
of 2004 (together, the Reports), the Company and NNL are not in compliance
with their obligations to deliver their SEC filings to the trustees under their
public debt indentures. Notwithstanding the Companys and NNLs expectation
that the Reports will be filed in mid November 2004, upon the delay in filing
financial statements for the third quarter of 2004, and the related Quarterly
Reports on Form 10-Q, to a date past November 24, 2004, the Company and NNL
will not be in compliance with their obligations under the indentures. While a
notice of default could have been given at any time after March 30, 2004,
neither the Company or NNL has received a notice as of October 26, 2004. EDC Support Facility As the filing of the Reports are expected to occur after October 31, 2004, and
the filing of the third quarter 2004 Quarterly Reports on Form 10-Q after
November 24, 2004, Export Development Canada (EDC) will have the right, on
such dates, unless EDC has granted a further waiver in relation to the delayed
filings and certain other breaches related to the restatements, to terminate
the EDC performance-related support facility and exercise certain rights
against collateral or require NNL to cash collaterize all existing support.
While NNL expects to seek a new waiver from EDC, there can be no assurance that
NNL will receive a new waiver or as to the terms of any such waiver. Other Matters Annual Shareholders Meeting As previously announced, the Company was granted an order by the Ontario
Superior Court of Justice extending the time for calling the Companys 2004
Annual Shareholders Meeting (the Meeting) to a date not later than December
31, 2004 or such later date as the Court may further permit. As a result of the
above, the Company intends to seek an order extending the time for calling the
Meeting to no later than March 31, 2005. The Company intends to hold the
Meeting as soon as practicable after its 2003 audited financial statements are
completed and available for mailing to shareholders. With the exception of the matters noted above, the Company and NNL have
reported that there have been no material developments in the matters reported
in their status updates of June 2, 2004, June 29, 2004, July 13, 2004, July 27,
2004, August 10, 2004, August 19, 2004, September 2, 2004, September 16, 2004,
September 30, 2004 and October 14, 2004. * * * * * * * * * * * * * * * * * As a global innovation leader, Nortel Networks enriches consumer and business
communications worldwide by offering converged multimedia networks that
eliminate the boundaries among voice, data and video. These networks use
innovative packet, wireless, voice and optical technologies and are underpinned
by high standards of security and reliability. For both carriers and
enterprises, these networks help to drive increased profitability and
productivity by reducing costs and enabling new business and consumer services
opportunities. Nortel Networks does business in more than 150 countries. For
more information, visit Nortel Networks on the Web at www.nortelnetworks.com or
www.nortelnetworks.com/media_center.




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Page 4 Certain information included in this press release is forward-looking and is
subject to important risks and uncertainties. The results or events predicted
in these statements may differ materially from actual results or events.
Factors which could cause results or events to differ from current expectations
include, among other things: the outcome of Nortel Networks independent review
and planned restatement or revisions of its previously announced or filed
financial results; the impact of the management changes announced on April 28,
2004 and August 19, 2004; the impact of the inability to meet Nortel Networks
filing obligations on support facilities and public debt obligations; the
sufficiency of Nortel Networks restructuring activities, including the work
plan announced on August 19, 2004 as updated on September 30, 2004, including
the potential for higher actual costs to be incurred in connection with
restructuring actions compared to the estimated costs of such actions; cautious
or reduced spending by Nortel Networks customers; fluctuations in Nortel
Networks operating results and general industry, economic and market conditions
and growth rates; the communication by Nortel Networks auditors of the
existence of material weaknesses in internal controls; Nortel Networks ability
to recruit and retain qualified employees; fluctuations in Nortel Networks cash
flow, level of outstanding debt and current debt ratings; the use of cash
collateral to support Nortel Networks normal course business activities; the
dependence on Nortel Networks subsidiaries for funding; the impact of Nortel
Networks defined benefit plans and deferred tax assets on results of operations
and Nortel Networks cash flows; Nortel Networks dependence on new product
development and its ability to predict market demand for particular products;
Nortel Networks ability to integrate the operations and technologies of
acquired businesses in an effective manner; the impact of rapid technological
and market change; the impact of price and product competition; barriers to
international growth and global economic conditions, particularly in emerging
markets and including interest rate and currency exchange rate fluctuations;
the impact of rationalization in the telecommunications industry; changes in
regulation of the Internet; the impact of the credit risks of Nortel Networks
customers and the impact of customer financing and commitments; stock market
volatility generally and as a result of acceleration of the settlement date or
early settlement of Nortel Networks purchase contracts; the impact of Nortel
Networks supply and outsourcing contracts that contain delivery and
installation provisions, which, if not met, could result in the payment of
substantial penalties or liquidated damages; the future success of Nortel
Networks strategic alliances; and the adverse resolution of litigation,
investigations, intellectual property disputes and similar matters. For
additional information with respect to certain of these and other factors, see
the most recentForm 10-Q/AandForm 10-K/Afiled by Nortel Networks with the
United States Securities and Exchange Commission. Unless otherwise required by
applicable securities laws, Nortel Networks disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. -end- *Nortel Networks, the Nortel Networks logo, the Globemark and Business Without Boundaries are trademarks of Nortel Networks.