The financial value of the non-exclusive arrangement is derived from the billions of dollars in additional revenue both companies expect to earn during the 21-month contract term, officials said.
SBC is the United States' largest local telephone company.
The arrangement applies to SBC services offered in the US but does not replace earlier SBC supply deals with other vendors, said Tom McGrath, president of the SBC DataComm unit.
The contract calls for SBC and Cisco to co-market SBC services with Cisco equipment to SBC's millions of business and residential customers. It also marks the first time that SBC will buy and install Cisco data equipment in its backbone network.
Reaching a 'confidence level'
During the last nine months or so, after long considering Cisco as a provider only of gear for customer premises, "We got to a confidence level that Cisco could provide carrier-class equipment for our backbone," McGrath said Wednesday.
The arrangement covers an array of Cisco equipment, although the bulk of the deal will consist of Cisco 6000-series DSLAMs (digital subscriber line access multiplexers), 6400-series traffic aggregators, the BPX and MGX ATM (asynchronous transfer mode) switching platforms, and Cisco's 5300- and 5800-series dial platforms, said officials at the companies.
Specific SBC services for which Cisco will provide equipment include DSL, EVPN (enterprise virtual private network) and ATM, as well as a Broadband Capabilities Gateway service for switching DSL lines among various ISPs or LANs.
For SBC, choosing Cisco is a way to move further into next-generation IP-based services, complementing its more conventional voice and circuit-switched data offerings, officials said. It will also help the telco tackle new opportunities in fields such as Web hosting and e-commerce, they said.
In addition, the Cisco deal will enable SBC to provide customers with more comprehensive packages of managed data services and equipment, officials said.
Shares of Cisco were down 75 cents to US$68.50 on the Nasdaq Stock Market, while shares of SBC were up 81 cents to US$42.31 on the New York Stock Exchange.
