Verizon used Nortel equipment for some intercity packet-conversion work in 2002, and Nortel already has begun shipping Succession 2000 soft switches and the Multimedia Communication Server 5200 to Verizon for the next phase of circuit-to-packet conversion. The 2002 deal did not make Nortel a shoo-in for the broader contract, Verizon sources said, since Verizon treated its convergence platform contract as a full competitive analysis of several vendors' systems.
Jim Dondero, vice president of marketing for wireline products at Nortel, said that the real significance of the new pact was that all traditional Class 4 and 5 circuit switches would eventually be taken out of Verizon's network, making the local and long-distance nets end-to-end IP (a Class 5 TDM switch is used for local services, while a Class 4 "tandem" switch is used in interconnecting regions).
Nortel could realize two advantages in this transformation, Dondero said: from being a primary supplier to a large carrier for true IP convergence, and from possible secondary business as other carriers respond to Verizon's decision to phase out circuit switching. "In terms of its impact within the industry, this is a very big deal," Dondero said. The Verizon architecture shift and new service offerings affect enterprise customers of every size, as well as residential customers, he said.
The Succession and MCS products will be the primary hardware platforms of Verizon's local and long-distance packet-conversion program. Nortel will be the exclusive provider of soft switches to replace both Class 4 tandem and Class 5 local-switch functions. Verizon also will sell the full suite of Nortel's Enterprise IP Telephony products to enterprise customers, and will work in conjunction with Nortel to encourage customers of Nortel Meridian PBX and Norstar key systems to upgrade to packet-based systems.
Dondero said that Nortel will continue to support PBX and key-system customers with upgrades to existing hardware platforms, but will emphasize transitions to IP-based enterprise systems in the future.
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