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Nortel spruces up its Net phone products

Nortel Networks adds to its family of phone products that help businesses switch from older, traditional phone technology to Internet-based phone systems.

LAS VEGAS--Nortel Networks is diving deeper into the Internet telephony pool.

The company on Wednesday added to its family of phone products that help businesses switch from older, traditional phone technology to Internet-based phone systems.

Like rivals Cisco Systems, Avaya, 3Com, Alcatel and others, Nortel has sold Net-based phone systems as a cheaper alternative to traditional phone systems, called PBX, short for private branch exchange. The new technology combines voice and data traffic into a single Internet connection, making the network easier to maintain.

Analysts say Nortel's move to Internet telephony is aimed at keeping its large base of customers that have historically used traditional phone equipment. The nascent market for Net-based phone systems is beginning to take off, but it's still a small slice of the $20 billion traditional phone system market, analysts say.

On Wednesday, at the Networld+Interop networking industry trade show here, Nortel said it will release in July Internet phone technology that will allow its small and midsized business customers to support Net-based phone calls for the first time. Customers using Nortel's older Norstar phone system can simply migrate to Net-based phone calls by installing the new technology, executives said in a press conference.

Nortel will also release next month its previously announced Succession Net-based phone system aimed at larger businesses. The company previously released technology that allowed customers of its traditional Meridian phone systems to migrate to Net-based phone calls.

Eric Ross, president of Nortel's enterprise business, said Nortel's Internet telephony product line allows customers to adopt the new technology as fast or as slow as they want.

Ross said he believes all of Nortel's customers will eventually move to Internet telephony, with about 20 percent switching to the new Net-based products, while about 80 percent will choose to support Net telephony in the traditional phone systems they already own.

Nortel on Wednesday also announced new networking equipment aimed at metropolitan networks, a market that includes a raft of competitors including Cisco, Foundry Networks, Extreme Networks, and Riverstone Networks.

Nortel announced new optical equipment that runs at 10-gigabit Ethernet speeds, ten times faster than previous technology. All networking equipment makers are releasing Ethernet-based products that reach faster speeds.