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New Members Add Momentum to Nortel-led Carrier Ethernet Ecosystem

Bring Unique Attributes, Expertise to Industry Consortium

Toronto — December 11, 2007 — Seven new members have joined the industry's Carrier Ethernet Ecosystem, led by Nortel* (NYSE/TSX: NT). The Carrier Ethernet Ecosystem is a group of companies dedicated to developing new, Ethernet-based approaches to meeting the burgeoning bandwidth demands from the increasing popularity of HD video, social media and advanced business services.

The Carrier Ethernet Ecosystem has taken a bold approach to ensure availability of solutions that address these challenges while preserving Ethernet's traditional cost model. Once used primarily for enterprise networks, Ethernet now can provide powerful value for carriers as well. Through its scalability, Ethernet has the ability to grow the network to accommodate new users and new bandwidth-consuming applications simply. Ethernet for carriers also can provide cost savings of up to 40 to 60 percent from traditional technologies because it requires less equipment and is less costly to maintain.

"Today's announcement of seven new members of the Carrier Ethernet Ecosystem underscores the momentum Nortel is seeing in the industry as carriers are realizing the advantages of using Ethernet, particularly as it relates to cost, simplicity and the ability to grow network capacity as demand increases. We welcome the expertise and unique strengths the new members bring to boosting the capabilities of the Ecosystem," said Philippe Morin, president, Metro Ethernet Networks, Nortel. "The power of the Ecosystem is the ability to pre-test, pre-integrate and pre-configure Ethernet solutions, enabling carriers a solution with true plug-and-play simplicity."

The new companies bring unique abilities to the table, ensuring their solutions work with those of the other members while developing new capabilities for customers and furthering advances for Carrier Ethernet. The new members are:

• Bay Microsystems, a leading supplier of merchant processing solutions for 10G and beyond, it brings a unique perspective relative to advanced protocol support.
  
• Broadcom Corporation, a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom products enable the delivery of voice, video, data and multimedia to and throughout the home, office and mobile environment. The inclusion of PBT technology in Broadcom's StrataXGS(r) switch and scalable Ethernet switch product portfolios accelerates the adoption of this technology, while adding momentum to carrier Ethernet-based solutions.
  
• Ceterus Networks, an Ethernet access solution company, it brings new capabilities to the Ecosystem in the realm of intelligent Ethernet transport.
  
• Ethos Networks, a leader in dynamic quality of service and optimization solutions focused on maximizing the utilization of the existing Ethernet infrastructure, brings systems-wide solutions to the group.
  
• InfoVista, a provider of service-centric performance management for next generation networks, brings their leadership in Carrier Ethernet proactive service assurance.
  
• JDSU brings its leading test solutions for Metro Ethernet products and services, including those engineered for development and production, installation and maintenance, troubleshooting and overall service assurance.
  
• Zhone Technologies Inc. is a leading provider of multi-service access technology, offering an integrated suite of last-mile solutions for both copper and fiber networks that enable the full range of voice, video, residential broadband, and enterprise data services.
  

The new member companies join the roster of ANDA Networks, Axerra Networks, Extreme Networks, Dragonwave, Gridpoint Systems, Hammerhead Systems, Ixia, Lightstorm Networks, Meriton Networks, RAD Data Communications, Soapstone Networks, Spirent Communications, TPACK Systems and TranSwitch.

Most recently, the Carrier Ethernet Ecosystem participated in the world's largest Carrier Ethernet interoperability demonstration in August at the Carrier Ethernet World Congress in Geneva, in which more than 24 vendors showed their carrier Ethernet wares.

About Zhone Technologies

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a global leader in all IP multi-service access solutions, serving more than 750 of the world's most innovative network operators.

The IP Zhone is the only solution that enables service providers to build the network of the future…today, supporting end-to-end Voice, Data, Entertainment Social Media, Business, Mobile Backhaul and Mobility service.

Zhone is committed to building the fastest and highest quality All IP Multi-Service solution for its customers.

Zhone is headquartered in California and its products are manufactured in the USA in a facility that is emission, waste-water and CFC free.

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. For the latest Nortel news, visit www.nortel.com/news.

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Certain statements in this press release may contain words such as "could", "expects", "may", "anticipates", "believes", "intends", "estimates", "targets", "envisions", "seeks" and other similar language and are considered forward-looking statements or information under applicable securities legislation. These statements are based on Nortel's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties, which are difficult to predict and the actual outcome may be materially different from those contemplated in forward-looking statements. For additional information with respect to certain of these and other factors, see Nortel's Annual Report on Form10-K, Quarterly Reports on Form 10-Q and other securities filings 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.

*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.