IBM inks $972M voice, data deal with Lloyds

U.K. bank Lloyds TSB is moving to a converged voice and data network

IBM said today that it won a $972 million, seven-year services contract to help move U.K. bank Lloyds TSB Group PLC from its traditional voice infrastructure to a converged voice and data network.

The deal aims to improve connectivity for more than 2,000 Lloyds national branches and 4,200 ATMs by putting the bank on a dedicated high-capacity fiber, DSL and Multiprotocol Label Switching network, IBM said.

The infrastructure transfer will take place over 20 months and hopefully demonstrate how large banks and retailers can benefit from moving to converged fiber-optic networks, said IBM spokesman Bill Mew.

IBM predicts that Lloyds' branch communications will gain eight times their current bandwidth at a quarter of the price. Lloyds currently uses a traditional voice infrastructure comprised of private automatic branch exchange switches, a public-switched telephone network, a virtual private network and managed services, with a large chunk of its contracts held by BT Group PLC and Cable & Wireless PLC.

IBM beat BT on the deal partially because it is offering lower network tariff prices in conjunction with its carrier partners, Mew said. "IBM isn't entering the telecom market, but we are partnering with other companies working in this area to provide an interesting step change," he said.

IBM tapped Vtesse Networks to provide the fiber-optic network, and Vanco Group Ltd. for network integration and management. A variety of carriers will connect Lloyds' branches and ATMs.

The project will be one of the largest in Europe to implement voice-over-IP telephones, with almost 70,000 VoIP phones due to be installed, as it will also take advantage of the wealth of unused fiber-optic cable in the country, IBM said.

Mew added that the U.K. is a great case study for how to maximize existing, unused bandwidth. The U.K. has some 40,000 miles of fiber-optic cable, but only 5% is currently used, in part due to high tariffs, Mew said.

He added that IBM and its partners are offering a way to use the bandwidth at lower costs and that the project could easily be replicated for other large companies, and in other regions with a wealth of fiber-optic cables, such as Belgium, the Netherlands and Luxembourg.

Lloyds said it plans to use the new infrastructure to reduce incremental bandwidth costs, allow it to consider bandwidth-hungry Web-based applications and facilitate better communication with its customers.

Copyright © 2004 IDG Communications, Inc.

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