Nortel Networks - Acquisition Completed

RNS Number:6775E
Nortel Networks Corp
28 January 2000


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       Nortel Networks Announces Completion of Acquisition of Qtera 
       Continues First Mover Advantage In Optical Internet

BRAMPTON, Ont. - Nortel Networks* NYSE/TSE:NT) will today announced the
completion of the acquisition of Qtera Corporation, a privately-held company
that produces ultra-long-reach optical networking systems, for up to US$3.25
billion in Nortel Networks common shares, a portion of which is contingent upon
Qtera achieving certain business objectives. Qtera's scalable Optical Internet
capabilities enable high performance, rapid wavelength provisioning and
restoration, and most importantly, lowest cost survivable bandwidth.

"We are moving at the speed of light to maintain our first mover advantage in
the Optical Internet space", said John Roth, president and chief executive
officer, Nortel Networks. "Together we are going to continue to redefine the
speed, reliability, quality and economics of the Internet. This new, high
performance Internet will provide the foundation for a new era of eBusiness and
communications."

As a result of the merger, Qtera became a wholly-owned subsidiary of Nortel
Networks and each outstanding share of Qtera preferred stock and common stock
was converted into a right to receive 1,3350 Nortel Networks common shares, for
a total of approximately 23 million Nortel Networks common shares. Approximately
5 million Nortel Networks common shares were reserved for issuance in respect of
Qtera options and warrants assumed by Nortel Networks. In addition, up to US$500
million in Nortel Networks common shares may be issued to former Qtera
shareholders upon Qtera achieving certain business objectives.

Qtera's operations will remain in Boca Raton, Florida and Richardson, Texas.
Qtera president and chief executive officer Fahri Diner will continue to lead
this business as president, reporting to Mike Unger, president, Optical
Networks, Nortel Networks.

Nortel Networks is a global leader in telephony, data, eBusiness, and wireless
solutions for the Internet. The Company had 1999 U.S. GAAP revenues of US$21.3
billion and serves carrier, service provider and enterprise customers globally.
Today, Nortel Networks is creating a high-performance Internet that is more
reliable and faster than ever before. It is redefining the economics and quality
of networking and the Internet through Unified Networks* that promise a new era
of collaboration, communications and commerce. 
Visit us at www.nortelnetworks.com

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 impact of price and product competition; the dependence
on new product development; the impact of rapid technological and market change;
the ability of Nortel Networks to integrate the operations and technologies of
acquired businesses in an effective manner, general industry and market
conditions and growth rates; international growth and global economic
conditions, particularly in emerging markets and including interest rate and
currency exchange rate fluctuations; unanticipated impact of Year 2000 issues;
and the impact of consolidations in the telecommunications industry. For
additional information with respect to certain of these and other factors, see
the reports filed by Nortel Networks with the United States Securities and
Exchange Commission. 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.

                               
*Nortel Networks, the Nortel Networks Globemark, United Networks, and How the
World shares ideas are trademarks of Nortel Networks. Qtera is a trademark of
Qtera Corporation.

   
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