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Exhibit 99.1 News Release
    
    (NORTEL NETWORKS LOGO)
 www.nortelnetworks.com FOR IMMEDIATE RELEASE
    
    August 10, 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. 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, and July 27, 2004, with the exception of the matters described
below. 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. The Company expects to be in a position to announce estimated limited
preliminary unaudited results for the first and second quarters of 2004, and to
provide an update on the restatement impacts, on August 19, 2004. These
estimated results will be subject to change and to the limitations outlined
below. The final unaudited results for the first and second quarters of 2004
will be available upon the filing of the quarterly reports for such periods
which the Company expects to file by the end of the third quarter of 2004. The
Company will hold a conference call at 8:30 a.m. ET on August 19, 2004 to
discuss the announcements. The Company expects to file, by the end of 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.




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Page 2 The Companys expectations as to the timing of events, including the
availability of estimated limited preliminary unaudited results for the first
and second quarters of 2004 and the filing of financial statements, 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. Status of Civil Proceedings On July 12, 2004, the Company received a letter purporting to be on behalf of
certain shareholders of Nortel Networks. The letter claimed that certain
directors and officers, and certain former directors and officers, of Nortel
Networks breached fiduciary duties owed to the Company during the period from
2000 to 2003 including by (i) causing the Company to engage in unlawful conduct
or failing to prevent such conduct; (ii) causing the Company to issue false
statements; and (iii) violating the law. The letter required that the Company
seek to recover its damages arising from the alleged breaches. The letter
demanded that the Company commence a proposed action against the listed
individuals within 14 days or the shareholders would do so. By return letter
dated July 20, 2004, Nortel Networks confirmed that its Board of Directors
would carefully consider the matters that had been raised. However, given the
nature and extent of the allegations, the Company stated that it was not
realistic for a response to be provided within the 14-day deadline. The
Companys Board of Directors have appointed a Special Committee to investigate,
review and evaluate the facts and circumstances surrounding the allegations
made in the letter. A complaint, substantially in the same form as the
complaint that accompanied the earlier letter, was filed on July 30, 2004 in
the United States District Court for the Southern District of New York. ************************ 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.




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