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Exhibit 99.1
 
 www.nortel.comFOR IMMEDIATE RELEASE
    
    September 30, 2005For more information:Media
    
    InvestorsPatricia Vernon
    
    (888) 901-7286(905) 863-1035
    
    (905) 863-6049patricve@nortel.com
    
    investor@nortel.com
 Nortel Provides Update on Pending Class Action Lawsuits
   About Nortel
 www.nortel.com www.nortel.com/news
 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 regulatory and criminal
investigations and civil litigation actions related to Nortels restatements and the impact any
resulting legal judgments, settlements, penalties and expenses could have on Nortels results of
operations, financial condition and liquidity, and any related potential dilution of Nortels
common shares; the findings of Nortels independent review and implementation of recommended
remedial measures; the outcome of the independent review with respect to revenues for specific
identified transactions, which review will have a particular emphasis on the underlying conduct
that led to the initial recognition of these revenues; the restatement or revisions of Nortels
previously announced or filed financial results and resulting negative publicity; the existence of
material weaknesses in Nortels internal control over financial reporting and the conclusion of
Nortels management and independent auditor that Nortels internal control over financial reporting
is ineffective, which could continue to impact Nortels ability to report its results of operations
and financial condition accurately and in a timely manner; the impact of Nortels and NNLs failure
to timely file their financial statements and related periodic reports, including Nortels
inability to access its shelf registration statement filed with the United States Securities and
Exchange Commission (SEC); ongoing SEC reviews, which may result in changes to Nortels and NNLs
public filings; the impact of management changes, including the termination for cause of Nortels
former CEO, CFO and Controller in April 2004; the sufficiency of Nortels restructuring activities,
including the work plan announced on August 19, 2004 as updated on September 30, 2004 and December
14, 2004, including the potential for higher actual costs to be




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incurred in connection with restructuring actions compared to the estimated costs of such actions;
cautious or reduced spending by Nortels customers; increased consolidation among Nortels
customers and the loss of customers in certain markets; fluctuations in Nortels operating results
and general industry, economic and market conditions and growth rates; fluctuations in Nortels
cash flow, level of outstanding debt and current debt ratings; Nortels monitoring of the capital
markets for opportunities to improve its capital structure and financial flexibility; Nortels
ability to recruit and retain qualified employees; the use of cash collateral to support Nortels
normal course business activities; the dependence on Nortels subsidiaries for funding; the impact
of Nortels defined benefit plans and deferred tax assets on results of operations and Nortels
cash flow; the adverse resolution of class actions, litigation in the ordinary course of business,
intellectual property disputes and similar matters; Nortels dependence on new product development
and its ability to predict market demand for particular products; Nortels 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 and
consolidation in the telecommunications industry; changes in regulation of the Internet; the impact
of the credit risks of Nortels customers and the impact of customer financing and commitments;
stock market volatility generally; negative developments associated with Nortels supply contracts
and contract manufacturing agreements, including as a result of using a sole supplier for a key
component of certain optical networks solutions; the impact of Nortels 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; any undetected product defects, errors or
failures; and the future success of Nortels strategic alliances. For additional information with
respect to certain of these and other factors, see the most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q filed by Nortel with the SEC. Unless otherwise required by applicable
securities laws, Nortel disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.