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Press Release

BT Selects Nortel to Deploy One of Europe’s Largest IP Telephony-Based Virtual Contact Centres with Nearly 10,000 Agents

IP Enables Increased Customer Interaction, Agent Flexibility Plus Lower Operational Costs

LONDON - After extensive technical and commercial analysis of vendors, BT has selected Nortel* [NYSE/TSX: NT] market-leading Internet Protocol (IP) telephony and contact centre solutions to upgrade its contact centre infrastructure that serves more than 500 business units across 124 sites in the UK. The US$5 million contract represents one of the largest scale deployments of a Voice over IP (VoIP) based Virtual Contact Centre across Europe, the Middle East and Africa (EMEA).

BT will apply the IP technologies to streamline interaction across its operating businesses, helping almost 10,000 agents to meet the objectives of its highly publicised “Customer Promise” initiative, ensuring calls are answered quickly and are efficiently directed to the appropriate part of the business to achieve higher levels of customer satisfaction.

In addition, the upgraded infrastructure will make it possible for BT to reduce operational costs and boost efficiency by making it much easier to operate agents across multiple sites, thereby allowing dispersed teams to seamlessly work together as if in a single contact centre location.

“It is imperative that BT's internal network continues to be developed to meet new business challenges as we constantly strive to deliver an excellent customer experience. This latest investment in Nortel industry-leading IP technology underlines our commitment and determination to build an infrastructure that will help facilitate that,” said Neil Hemming, general manager for Channel & Market Development in Convergent Solutions, BT Global Services.

“As experts in the convergence space, we advise our business customers on a daily basis about the benefits which can be realised through deploying IP telephony applications within a converged network, and so it's satisfying to be able to demonstrate that we are practicing what we preach to realise the benefits for ourselves. This deployment will swell the number of BT people in the UK using Nortel-based IP telephony applications to nearly 10,000,” Hemming said.
 
“We are extremely excited to have won this important contract with our premier strategic partner BT,” said Peter Kelly, president, Enterprise Networks, EMEA, Nortel. “BT’s selection of our solution is a huge vote of confidence in our VoIP and contact centre technology and demonstrates that convergence really can deliver huge benefits and reduced costs on a very large scale.”

“We are confident that our solution will assist BT in achieving greater degrees of customer satisfaction, and will highly benefit BT’s IP contact centre operations throughout the UK,” Kelly said. “In addition, Nortel will help BT reach its goals by supplying a cost-effective solution that does not require additional expertise or people.”

Nortel IP Contact Centre solutions enable companies to create a virtual contact centre that spans wide geographic areas and crosses multiple time zones, ensuring the most appropriate agent available handles each caller's needs promptly. Rather than maintain separate voice and data infrastructures, they can be converged. The resulting converged network can operate more efficiently and reduce staffing, management and training costs. End-users benefit from seamless access to the service - anytime, anywhere.
“This deal illustrates how far IP contact centers have come,” said Robin Goad, senior analyst, Datamonitor, “Large organizations with multiple sites benefit from IP, and Nortel has shown that it has the technology and expertise to deliver what we believe will be the largest IP contact center in EMEA”.

The consolidated, converged infrastructure based on Nortel’s VoIP call server portfolio will replace BT’s existing distributed infrastructure based on a Nortel Meridian* 1* PBX telephony system and Meridian MAX call routing technology. The upgrade is consistent with Nortel’s evergreen technology strategy, which allows customers to evolve their existing telephone systems, phasing in VoIP as needed to provide a rapid return on investment.

BT will also deploy Nortel Communication Server 1000 to five core sites across the UK, providing integrated IP telephony services with an extensive desktop portfolio to meet end-user requirements for its internal contact centre operations.
The deployment will include Symposium* Call Center Server, which is designed on an industry-standard platform to enable real-time data and host data exchange; advanced call handling with the capability of multimedia transaction handling; and Web-enabled functionality. In addition, almost 10,000 Nortel 2004 IP phones will be deployed to BT’s internal contact centre agents.

About Nortel
Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world’s most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world’s greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Certain information included in this press release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the outcome of Nortel’s independent review and planned restatement or revisions of its previously announced or filed financial results; the resolution of the accounting issues announced on November 11, 2004, including the outcome of discussions with the United States Securities and Exchange Commission (SEC); the impact of the management changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet Nortel’s filing obligations on support facilities and public debt obligations; any potential delisting or suspension of the Company’s or NNL’s securities; the adverse resolution of litigation, investigations, intellectual property disputes and similar matters; the sufficiency of Nortel’s restructuring activities, including the work plan announced on August 19, 2004 as updated on September 30, 2004, including the potential for higher actual costs to be incurred in connection with restructuring actions compared to the estimated costs of such actions; cautious or reduced spending by Nortel’s customers; fluctuations in Nortel’s operating results and general industry, economic and market conditions and growth rates; the communication by Nortel’s auditors of the existence of material weaknesses in internal controls; Nortel’s ability to recruit and retain qualified employees; fluctuations in Nortel’s cash flow, level of outstanding debt and current debt ratings; the use of cash collateral to support Nortel’s normal course business activities; the dependence on Nortel’s subsidiaries for funding; the impact of Nortel’s defined benefit plans and deferred tax assets on results of operations and Nortel’s cash flows; Nortel’s dependence on new product development and its ability to predict market demand for particular products; Nortel’s ability to integrate the operations and technologies of acquired businesses in an effective manner; the impact of rapid technological and market change; the impact of price and product competition; barriers to international growth and global economic conditions, particularly in emerging markets and including interest rate and currency exchange rate fluctuations; the impact of rationalization in the telecommunications industry; changes in regulation of the Internet; the impact of the credit risks of Nortel’s customers and the impact of customer financing and commitments; stock market volatility generally and as a result of acceleration of the settlement date or early settlement of Nortel’s purchase contracts; the impact of Nortel’s supply and outsourcing contracts that contain delivery and installation provisions, which, if not met, could result in the payment of substantial penalties or liquidated damages; and the future success of Nortel’s strategic alliances. For additional information with respect to certain of these and other factors, see the most recent Form 10-Q/A and Form 10-K/A filed by Nortel with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
-end-

*Nortel, the Nortel logo, the Globemark, Meridian, Meridian 1 and Symposium are trademarks of Nortel Networks.

Angelika Kempf  
(425) 450-7523
angelika.kempf@nortelnetworks.com

Giorgia Casnedi  
+44 1628 43-7340   
casnedi@nortelnetworks.com

Pat Cooper
+44 1628 43-3117
pat.cooper@nortelnetworks.com

www.nortel.com.