Nortel and Sprint give billion-dollar boost to internet telephony

Voice over IP will cost them dear...

US telco Sprint has inked a deal with Nortel Networks worth $1.1bn to change its entire customer base from circuit switched services to Voice Over Internet Protocol (VOIP). The two companies insist that Sprint will make big cost savings by using packet voice services, which will allow the telco to make better use of its existing infrastructure. The new network allows multiple users to share the same line, thereby maximising the revenue potential of the network. Mike Fuller, president of Sprint's local telecoms division, said in a statement: "Packetisation not only makes the network simpler and more cost effective, it also opens the door to new services that can run across existing telephone lines."