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Johanne Torres[December 6, 2004]

IBM Enters VoIP Space Scoring $969 Million Deal


Most of us in the industry have been waiting to see how IBM (quote - news - alert) would enter the VoIP ( define - news - alert) space. Being IBM, we expected the company to make a grand entrance, and it just has. The computer giant just struck a VoIP deal with British bank Lloyds TSB for a reported $969 million.

According to the agreement, IBM will, in the course of seven years, provide voice and data integration services to Lloyds, enabling the bank to soon perform all telecommunications tasks using Internet telephony-based devices.

It is yet to be known who will provide the VoIP equipment for the more than 70,000 stations at this point. IBM’s announcement does not mention that the company is providing the devices itself, or partnering with an IP phone developer in the ranks of 3Com or Cisco. Many of us expected IBM to launch Internet telephony devices of their own. This new contract, however, certainly places the computer giant in the VoIP radar, as it assisted in one of the largest deployments in Europe to date.

IBM said, "The implementation, which includes almost 70,000 Voice over IP (VoIP) telephones, is one of the largest ever in Europe and will reduce Lloyds TSB's network costs." The company believes that the new deal will allow Lloyds to reduce the need to install and maintain two separate networks, one for voice and one for data communications.

IBM will act as the strategic technology partner to the bank, while network integration and management to all Lloyds TSB branches and ATM machines will be provided by British-based Vanco. Vanco, in a separate statement, said it estimated the value of the services it would supply over the seven years to be 19.1 million pounds, not including circuits or equipment. Vtesse Networks, a privately held company also from Britain, will supply the high-capacity fiber network. The new infrastructure will be rolled out over the next 20 months.

Johanne Torres is contributing editor for and Internet Telephony magazine. Previously, she was assistant editor for EContent magazine in Connecticut. She can be reached by e-mail at


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