Sprint’s Local Telecommunications Division (LTD) expects to become the first incumbent US carrier to transform its entire telephone network to a more cost-effective ‘packet’ voice network beginning with a supply and services agreement with Nortel Networks estimated to be worth approximately $1.1 billion over four years.
The transformation of current telephone networks has only just begun in the network core. Until now, the technology did not exist for the access portion of the telephone network, which connects subscribers to the network core.
‘Packetization’ enables voice, video and data traffic to be divided into packets that can be sent separately across the network. As a result, multiple phone calls and Internet connections can ‘share’ the same line. With packetization, bandwidth dedicated to a single call on today’s networks can, for example, be reallocated during moments of silence in the conversation to transmit packets from other calls or Internet connections. This enables more efficient use of network resources.
Serving business and residential customers in 18 states from the mid-Atlantic to the Pacific Northwest, Sprint plans to transform its network to packet technology over an eight-year period.
The agreement with Nortel Networks covers 100 percent of Sprint’s planned first phase, a four-year activity expected to begin in January 2003 and, ultimately, to encompass 3.6 million telephone lines. Nortel Networks expects to ship the first equipment under the agreement in the fourth quarter of 2001, with initial deployment by Sprint in 2002 and volume shipments by Nortel Networks beginning in 2003.
Under this agreement, Sprint will use Nortel Networks to combine three separate networks into a single, converged network for voice, data and private line services. Sprint plans to deploy key elements of Nortel Networks carrier-grade Voice over IP portfolio, including Nortel Networks Succession Communication Server 2000 softswitches, MG 4000 trunking gateways, MG 9000 access gateways, and Nortel Networks Passport 15000 Multiservice Switches.