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Exhibit 99.1 (NORTEL LOGO) News Release www.nortelnetworks.com FOR IMMEDIATE RELEASE
    
    October 14, 2004For more information:Media:
    
    Investors:Tina Warren
(905) 863-4702tinawarr@nortelnetworks.com
    
    (888) 901-7286
(905) 863-6049investor@nortelnetworks.com
 Nortel Networks Provides Update on Agreement with Flextronics to Divest Certain
Nortel Networks Manufacturing Operations and Related Activities TORONTO  Nortel Networks* Corporation [NYSE/TSX:NT] announced today an update
concerning implementation of the agreement announced June 29, 2004 for the
Company to divest certain manufacturing operations and related activities to
Flextronics. As previously announced, the transfer of the optical design
operations and related assets in Ottawa, Canada and Monkstown, Northern Ireland
is expected to close in the fourth quarter of 2004. The transfer of the
Montreal manufacturing activities, originally planned for the fourth quarter of
2004, is now scheduled to be completed in the first quarter of 2005. As
previously announced, the balance of the divesture is anticipated to close in
the first half of 2005, subject to completion of the required information and
consultation processes with the relevant employee representatives. As part of
the closing schedule, the transfer of the Calgary manufacturing activities is
anticipated to close in the second quarter of 2005. The later closing of the Montreal manufacturing activities is due to Nortel
Networks continuing focus on the completion of the Companys restatement of its
financial statements and the required regulatory filings. The change in
schedule is not expected to have a material effect on Nortel Networks 2004 year
end cash balance or the previously announced timeline for anticipated cost
savings from related internal efficiencies. 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. 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 risk that the transaction with Flextronics may
not be completed on the expected schedule or at all; adjustments to expected
proceeds from the transaction with Flextronics resulting from post-closing
asset valuations and post-closing indemnity payments; the ability of
Flextronics to exercise certain contractual put rights with respect to certain
inventory and equipment; 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




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Page 2 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 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.