Nortel Declares Preferred Share Dividends

The dividend amount for each series is calculated in accordance with the terms and conditions applicable to each series, as set out in the Company's articles of incorporation. The annual dividend rate for each series floats in relation to changes in the average of the prime rate of Royal Bank of Canada and The Toronto-Dominion Bank during the preceding month ("Prime") and is adjusted upwards or downwards on a monthly basis by an adjustment factor that is based on the respective weighted average daily trading price of each series for the preceding month. The maximum monthly adjustment for changes in the weighted average daily trading price of each series will be plus or minus 4.0% of Prime. The annual floating dividend rate applicable for a month will in no event be less than 50% of Prime or greater than Prime. The dividend on each series in respect of the month of August is payable on September 12, 2007 to shareholders of record of such series at the close of business on August 31, 2007. The dividend on each series in respect of the month of September is payable on October 12, 2007 to shareholders of record of such series at the close of business on September 28, 2007.-Nortel Networks