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Exhibit 99.1 News Release
    
    (NORTEL LOGO)www.nortelnetworks.comFOR IMMEDIATE RELEASE
    
    September 30, 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 UpdateProvides Details on Work Plan to Reduce Costs 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,
July 13, 2004, July 27, 2004, August 10, 2004, August 19, 2004, September 2,
2004 and September 16, 2004, with the exception of the matters described below. Work Plan Nortel Networks and NNL today announced an update to their work plan previously
announced on August 19, 2004, including details concerning anticipated
workforce reductions, the timing for completion and associated updates on
estimated cost and savings impacts. The work plan involves focused workforce
reductions, a voluntary retirement program, real estate optimization and other
cost containment actions such as reductions in information services costs,
outsourced services and other discretionary spending. The Company currently
expects the workforce reduction notifications to be completed by June 30, 2005
and the real estate actions to be completed by the end of 2005. The decisions made to reduce our employee community and refine operational
efficiencies have been undertaken in a very considered way, said Bill Owens,
president and chief executive officer, Nortel Networks. Our workforce actions
are focused to disproportionately protect customer and sales facing roles as
well as continue our focus on new innovative solutions. Our overall objective
is to grow the business and to ensure that we have the appropriate levels of
investment in key growth businesses and markets. The work plan outlined today
will allow us to trim our cost structure by streamlining our business to drive
more efficient operations. This plan demonstrates our commitment to costs,
cash and revenues as strategic imperatives in managing our business and
driving growth.




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Page 2 Workforce The Companys work plan now includes targeted workforce reductions of
approximately 3,250 employees. Approximately two-thirds of the employees are
expected to be notified by December 31, 2004 with the remainder expected to be
notified by June 30, 2005. These focused headcount reductions are intended to
result in ongoing cost reductions in research and development expenses,
selling, general and administrative expenses, and cost of sales. These actions
are subject to the completion of required jurisdictional consultation and
regulatory approvals. The anticipated approximate regional impacts of the
reductions are set out below. Region
    
    Approximate Employee ReductionsUnited States
    
    
    1,400Canada
    
    
    950Europe, Middle East and Africa (EMEA)
    
    
    650Other
    
    
    250
 Real Estate The work plan also includes the reduction of approximately 2 million square
feet of occupied space as a result of the workforce reductions and improved
space utilization through consolidation of locations. The Company expects the
real estate actions to be completed by the end of 2005. Costs The Company now estimates charges to the income statement associated with its
overall work plan in the aggregate of approximately US$450 million comprised of
approximately US$220 million with respect to the workforce reductions and
approximately US$230 million with respect to the real estate actions. No
charges are expected to be recorded with respect to the other cost containment
actions. Approximately 35 percent of the aggregate income statement charges are
expected to be incurred in 2004 with the remainder in 2005. The associated cash costs of the work plan of approximately US$430 million are
split approximately equally between the workforce reductions and real estate
actions. Approximately 10 percent of these cash costs are expected to be
incurred in 2004 and approximately 40 percent are expected to be incurred in
2005. The remaining 50 percent of the cash costs relates to the real estate
actions and are expected be incurred in 2006 through to 2022 for ongoing lease
costs related to impacted real estate facilities. In addition to the above, the Company also expects to incur capital cash costs
of approximately US$50 million in 2005 for facility improvements related to the
real estate actions. Overall costs of the work plan are higher than previous estimates principally
due to more extensive real estate actions which are expected to result in
increased longer term cost savings. Cost Savings The Company anticipates cost savings from the implementation of the work plan
of approximately US$500 million in 2005, which are expected to increase on an
annualized basis beyond 2005 as the full impact of the work plan is realized.




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Page 3 Business Model Nortel Networks continues to expect to reduce its operating expenses to 35
percent of revenues or lower on an annualized basis in 2005. This expectation
takes into consideration the implementation of the work plan as outlined above
and incremental investments associated with the Companys previously announced
strategic plan including its focus on the government and defense customer
segments, marketing initiatives, and solutions that support secure, reliable,
converged networks. EDC Support Facility Nortel Networks also announced that NNL has obtained a new waiver from Export
Development Canada (EDC) under the EDC performance-related support facility
(the EDC Support Facility). It is a waiver of certain defaults related to
the delay by the Company and NNL in filing their respective 2003 Annual Reports
on Form 10-K, Q1 2004 Quarterly Reports on Form 10-Q and Q2 2004 Quarterly
Reports on Form 10-Q (collectively, the Reports), in each case with the U.S.
Securities and Exchange Commission (the SEC), the trustees under the
Companys and NNLs public debt indentures and EDC. The waiver also applies to
certain additional breaches under the EDC Support Facility relating to the
delayed filings and the previously announced restatement of the Companys and
NNLs financial results. The new waiver from EDC will remain in effect until the earlier of certain
events including:  
    
    the date on which the Reports have been filed with the SEC; or
    
    October 31, 2004. NNLs prior waiver from EDC, previously announced on August 20, 2004, was set
to expire on September 30, 2004. The EDC Support Facility provides up to US$750 million in support, all
presently on an uncommitted basis. Once the Reports have been filed with the
SEC and the related breaches cured, the US$300 million revolving small bond
sub-facility of the EDC Support Facility would again become committed support.
As of September 29, 2004, there was approximately US$273 million of outstanding
support utilized under the EDC Support Facility, approximately US$201 million
of which was outstanding under the small bond sub-facility. If the Company and NNL fail to file the Reports within the waiver period, there
can be no assurance that NNL would receive any further waivers or any
extensions of the waiver beyond its scheduled expiry date. If the waiver
announced today expires prior to the filing of such Reports, EDC would have the
right at such time to require NNL to cash collateralize the support outstanding
under the EDC Support Facility and to exercise its rights against the
collateral under related security agreements. As previously announced, the
Company and NNL expect to file the Reports by the end of October 2004. ***************




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Page 4 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 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 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.