Boeing picks Cisco for IP phones

CHICAGO: Boeing Co. has picked Cisco Systems Inc., the world's largest maker of gear that directs Internet traffic, to install its Internet voice transmission equipment in Boeing's communications network, Cisco said.

Boeing will roll out Cisco's Internet protocol (IP) phones across the U.S. aerospace group's global operations, which employs more than 150,000 people in 48 states and 70 countries, Cisco said.

Terms of the deal were not disclosed, but Boeing officials said it expects to install 180,000 Cisco IP phones and 125 IP switches over the next five to seven years.

Calls made using voice over IP, also known as VOIP, are carried over data networks, making them less expensive than traditional phone services, which require a single dedicated line for each call.

Industry research firm Gartner Inc. forecasts that by 2008, about 17 percent of North American phone lines -- about 23 million -- will have been replaced with VOIP service.

Boeing said it plans to shift its voice, video and data networks to a single IP network in a move to boost efficiency and cut costs. Its pilot program has been in place since July 2001 and has grown to about 4,500 Cisco IP phones installed at facilities in Missouri, Texas, Utah, and Washington.