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    Bell, Cisco expected to ring up IP deal  
    Canadian phone giant says it will make 'very important announcement' today


Monday, January 19, 2004

Bell Canada and Cisco Systems Canada Co. are expected to announce a significant deal today involving Internet protocol network equipment.

An industry source, who asked not to be named, said the announcement will be made by Terry Walsh, president and chief executive officer of Cisco Canada, and Isabelle Courville, Bell's executive in charge of sales to large businesses.

The deal would be just the latest in a series of similar moves made by many telephone companies in North America. Internet protocol (IP) equipment can combine data and voice transmissions on a single network, rather than the current standard of two or more.

This cuts costs for phone companies and provides the foundation to sell new services.

Spokespeople at Montreal-based Bell didn't return calls for comment. The country's largest phone company did however send out a dispatch to industry consultants late Friday about a "very important announcement by Bell Canada" scheduled for this morning.

Willa Black, a Cisco Canada spokeswoman, said "we will make an announcement when we do have some news."

In September, Bell announced a three-year deal worth $200-million with Brampton, Ont.-based Nortel Networks Corp. for IP gear. Nortel's specialty is making such gear for telephone networks.

Nortel this month said it would be signing a five-year deal for IP products with Verizon Communications Inc. of New York. Analysts think it could be worth around $1-billion.

The specialty of Cisco Canada, wholly owned by Cisco Systems Inc. of San Jose, Calif., is selling IP gear for businesses. Cisco is the largest communications equipment maker in the world. It has a "long-standing relationship" with Bell, Ms. Black said.

Vancouver-based Telus Corp., Canada's No. 2 phone company, announced new IP services for businesses that use Cisco equipment in November.

Most industry analysts have been expecting some sort of important Cisco-Bell deal since the Nortel announcement.

Bell is owned by Montreal-based BCE Inc., which also owns Bell Globemedia, owner of The Globe and Mail and CTV television. In December, BCE unveiled an aggressive plan to transform its network to IP standards.

" The [communications] industry is at a tipping point," Michael Sabia, BCE president and chief executive officer, said on Dec. 17. "We intend to set a standard for the industry. We will not be outflanked."

Bell's decision to deepen its connection with Cisco is likely to complement the equipment it's buying from Nortel, said Iain Grant of telecom consultancy SeaBoard Group.

Nortel's IP gear is mainly installed at a phone company's network hubs. Cisco's gear is generally stationed on-site at individual businesses.

" From Bell's perspective, they simply want the world to know that if a customer has needs, Bell has the solution," Mr. Grant said. " 'Look no further' would be their watchword."



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