Optus yesterday revealed Canadian vendor Nortel, among others, would be a major winner under the Australian Taxation Office's (ATO) network and telephony upgrade that has been scheduled as part of its managed services deal with the telco.

John Simon, managing director of Optus' Enterprise and Business Group, yesterday said Nortel would be a key supplier for the network and telephony upgrade planned for the ATO over the coming six months. "We're using Nortel CS2K switches, which are high-end switches, and IP [internet protocol] phones from Nortel," Simon said. Juniper and Enterasys are also understood to be benefiting from the deal.

The deal would be welcome news for Nortel, which last year reassured Australian customers that its Canadian parent's financial woes would not impact them.

The ATO's current network suppliers include Nortel, Cisco and network security vendor Enterasys. A spokesperson said that the ATO owned its PABX system and handsets, while Telstra managed hardware.

The four-year, $186.5 million contract the ATO signed with Optus formed the base value of the deal, according to Simon, but the ATO's typical annual spend on managed network services is likely to see the deal increase in value to around $240 million over the term. The ATO will continue to use its current Telstra network until Optus has built the first portion of the new network, which is due by the end of the year, said Simon.

"We'll immediately commence the transition, including new equipment in offices and call centres. It's not just cutting over from one network to another. It's a transition and transformation," he said.