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Ericsson will provide MCI with the IP media gateways and telephony servers that it will need for the network upgrade, the two companies announced Wednesday.
The No. 2 U.S. long-distance carrier now uses circuit switches to manage voice and data traffic to and from overseas operators. While reliable, the method is not as efficient, because the switches lock up bandwidth for use only by that data being shuttled. By using IP, voice calls are broken up into bits that can travel any number of paths.
Several U.S. telephone service providers say they are making the same technology swap at their network edges, moves that will complement their much more prevalent use of IP rather than circuit switches for domestic calls.
But the transition is especially important to MCI, which is looking for an edge in the industry now that local telephone competition rules have collapsed. "Ericsson's platform will enable MCI to further realize operational savings," MCI President Fred Briggs said in a statement.
The rules set cheap rates for access to rivals' local phone networks, which means the U.S. local phone market is now more expensive to operate in. In turn, MCI is focusing more on expanding beyond its traditional borders, according to some Wall Street watchers.
"International is a great opportunity for us," an MCI representative said.
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