ATLANTA -- Supercomm 2003 -- MCI (Nasdaq: MCIT) today picked Nortel Networks Corp. (NYSE/Toronto: NT) for a significant VOIP project, sending another signal that the convergence of IP networks and legacy voice networks is actually happening (see MCI Picks Nortel for VOIP).

MCI said it has picked Nortel's Passport Packet Voice Gateways as well its Succession Communication Server 2000 products to migrate all of its existing long-distance voice traffic to an IP network backbone. MCI said it's already deployed 36 Passport products and should deploy a total of 50 by the end of the year. MCI plans to have all of its voice traffic migrated to the IP backbone by 2005.

"We expect cost beneifts by consolidating networks and reducing the number of elements," said Rick Price, VP of Global Network Engineering with MCI. "The whole world of communications services is going to IP."

It's not clear how much money will change hands. But still, the move by MCI hints at the future of IP traffic in large telecom networks and bodes well for equipment vendors that have been preaching an IP convergence story, as has Nortel.

Nortel recently won a similar deal with Sprint Corp. (NYSE: FON) (see Sprint Starts on Softswitches), which also announced it would be migrating its long-distance traffic to an IP core. This combination of deals looks to have solidified Nortel's foothold as a leading VOIP player in North America.

— R. Scott Raynovich, US Editor, Light Reading