##### 



Exhibit 99.1 (NEWS RELEASE)
    
    (NORTEL NETWORK LOGO)
 www.nortelnetworks.com FOR IMMEDIATE RELEASE
For more information:
    
    July 27, 2004Media:
    
    Investors:Tina
Warren
(905) 863-4702
    
    (888) 901-7286
(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. The Company and NNL reported that there have been no material developments in
the matters reported in their status updates of June 2, 2004, June 29, 2004 and
July 13, 2004, with the exception of the matters described below. As previously announced, I continue to be focused on Nortel Networks strategic
direction and the improvements and efficiencies that we will need to put in
place to drive financial performance, said Bill Owens, president and chief
executive officer, Nortel Networks. I remain pleased with Nortel Networks
market momentum and continue to expect our revenues in 2004 to grow faster than
the market (which we expect will grow in the low to mid single digits).
However, as we move through 2004 and based on the work to date on our financial
results, it is clear that our business model is not achieving
our targeted operating
cost (SG&A and R&D) performance of below 40% of overall revenues and
our targeted gross margin percent of mid 40's. In conjunction with
the release of our limited preliminary unaudited results for the
first and second quarters of 2004 in mid August 2004, I will provide
a further update on the performance of our business and the actions
that we will be taking to put into place an improved cost structure
to optimize our financial performance. 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 earlier periods
including 2002 and 2001, and the preparation of their financial statements for
the full year 2003 and the first and second quarters of 2004.




---



##### 



Page 2 The Company continues to expect to be in a position to announce limited
preliminary unaudited results for the first and second quarters of 2004, and to
provide an update on the restatement impacts, in mid August 2004. The Company
continues to expect to file, in the third quarter of 2004, financial statements
for the year 2003 and the first and second quarters of 2004 and related
periodic reports, and follow thereafter, as soon as practicable, with any
required amendments to periodic reports for prior periods. The Companys expectations as to the timing of events, including the
availability of limited preliminary unaudited results for the first and second
quarters of 2004 and the filing of financial statements, and the performance of
the Companys business model in 2004, are subject to change and are subject to
a number of limitations. Specifically, these limitations include
the completion of the Companys work
(including the final determination of the impacts of adjustments arising from
events subsequent to year end 2003 on the Companys results of operations or financial
position), the related audits and reviews of results by the Companys and
NNLs independent auditors, and the completion and results of the previously
announced independent review being undertaken by the Nortel Networks Audit
Committee. ************************ Nortel Networks is an industry leader and innovator focused on transforming how
the world communicates and exchanges information. The Company is supplying its
service provider and enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and multimedia services
spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical
Networks. As a global company, Nortel Networks does business in more than 150
countries. More information about Nortel Networks can be found on the Web at
www.nortelnetworks.com or
www.nortelnetworks.com/media_center. 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 of its previously announced or filed financial results;
the impact of the management changes announced on April 28, 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 potential for higher actual costs to be incurred in
connection with restructuring actions compared to the estimated costs of such
actions; continued reductions in 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 control;
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 recent Form 10 Q/A and Form 10-K/A filed 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.