Nortel Refines Focus of Carrier Business Ends Joint Agreement with Alvarion for Mobile WiMAX JANUARY 29, 2009 TORONTO - Norte

TORONTO - Nortel* [OTC: NRTLQ, TSX: NT] announced that it has decided to discontinue its mobile WiMAX business and end its joint agreement with Alvarion Ltd. This decision, which will have no impact on Nortel's other solutions, will allow Nortel to narrow its focus, better manage its investments and strengthen its broader carrier business to better position itself for long-term competitiveness.

Nortel will work closely with Alvarion to transition its mobile WiMAX customers to help ensure that ongoing support commitments are met without interruption.

"We are taking rapid action to narrow our strategic focus to areas where we can drive maximum return on investment.  We will work closely with Alvarion to transition our mobile WiMAX customers to them and assure customers that they will continue to benefit from leading-edge technology and high-quality service," said Richard Lowe, president of carrier networks, Nortel.  "Our continued success in the wireless business requires us to focus our energy on opportunities with long-standing customers.  This will position Nortel more effectively to capitalize on future resurgence of carrier spend levels and drive value to the business."

The agreement, announced in June 2008, outlined the integration of Alvarion's advanced radio access network technology with Nortel's core network solutions, backhaul solutions, and global services. It also covered the resale by Nortel of the Alvarion platform of WiMAX access products.

"Our priority is to minimize the effect on customers," said Tzvika Friedman, president and CEO, Alvarion. "We will work closely with Nortel to ensure that the transition will be as smooth as possible."

About Nortel

Nortel is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. For more information, visit Nortel on the Web at www.nortel.com [1]. For the latest Nortel news, visit www.nortel.com/news [2].