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Lloyds to spend nearly $1 billion on broadband

European banking giant goes with IBM, becomes latest convert to Internet phone calls.

European banking giant Lloyds TSB has tapped IBM to assemble a voice and high-speed Internet network that connects branches, call centers and cash machines, the two companies said Monday.

Lloyds' seven-year, $970 million deal is another example of a large corporation collapsing high-speed data and phone services rather than maintaining separate networks. Auto giant Ford Motor, Bank of America and airplane manufacturer Boeing are recent converts to this corporate networking strategy.

IBM said it will install the new Lloyds infrastructure, using fiber cables, in about 20 months. It will also add 70,000 telephone lines based on voice over Internet Protocol (VoIP), a technique for making phone calls using the same protocols that are at the heart of the Internet and corporate data networks. By largely avoiding standard telephone networks, which are highly taxed, companies can save considerable money. Once completed, the VoIP installation will be among the largest in Europe, according to IBM.

Vanco, a global virtual network operator, will provide network integration and management, and estimates that its share is about $37 million. Vtesse Networks, an optical networking provider, is supplying a fiber-optic network for the endeavor. A Vtesse representative couldn't be reached immediately for comment.