BT nails down contracts for next-generation network

BT has finally completed its negotiations with several major telecoms equipment manufacturers over the technology that will power a forthcoming IP-based network across the UK.

The telco announced on Monday that it had reached agreement with Alcatel, Cisco, Ericsson and Fujitsu over contracts for the 21st Century Network (21CN).

Alcatel and Cisco are supplying metro nodes providing routing and signalling for 21CN's voice, data and video services. Cisco is also providing large-scale routers which will give high capacity, cost efficient connections between metro nodes. Ericsson will contribute the intelligence that controls the services, and Fujitsu will be providing access technology which will link BT's existing network with 21CN as it is rolled out.

21CN is a massive project and is likely to cost BT up to £10bn, which it expects to make back through cost savings in the future. The four companies were initially awarded their contracts in April 2005, along with Lucent, Huawei, Ciena and Siemens — who all completed their negotiations with BT last December.

BT wouldn't say why it had taken so much longer to finalise its contracts with Alcatel, Cisco, Ericsson and Fujitsu, but insisted that a great deal of detail had to be worked out for such a large project.

"In a contract of this size and complexity, it's inevitable that the negotiations would involve a lot of work to finalise all the details," BT said. BT is also not revealing financial details of the contracts.

Through 21CN, BT will replace a complicated set-up of circuit-based networks with a single IP-based one. This should allow it to run Internet telephony, and help it to offer high-speed broadband services across the country.

BT is thought to be the first incumbent telecoms operator to attempt a project of this size, and there have been indications in the past that it may have underestimated quite how challenging it will be.

It had originally hoped to select its preferred suppliers for 21CN before the end of March 2005, but in the end the process took a whole month longer.

BT staff, though, appear to be excited about the 21CN project.

"You could say we are sniffing our own exhaust fumes," said one senior BT executive on Monday, pointing out that BT needs to attempt such an ambitious move if it is to be a credible supplier of cutting-edge telecoms products and services.

ZDNet UK's Colin Barker contributed to this report.