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Avici Lands Nortel Contract

Nortel Networks has announced a deal with Avici Systems, which will develop and supply super-high-speed routers for Nortel. The three-year agreement calls for Nortel to integrate Avici products into the gear Nortel markets to major telephone companies.

Although actual sales are unlikely to start in significant volume until the second half of the year, Avici's stock jumped 30 percent on the news. Included in the agreement is Avici's Terabit Switch Router, its Stackable Switch Router, and its Quarter-rack Scalable Router. Avici's high-end routers are capable of moving trillions of bits of data a second.

"The teaming of Nortel Networks and Avici will be unique in the industry in its ability to deliver integrated, market-ready solutions specifically tailored for voice over IP, wireless/wireline convergence and carrier data networks," Nortel said in a statement Thursday. "The converged network will deliver voice, data, video and mobility services across a shared packet infrastructure."

Nortel said it will begin immediately to integrate Avici products into its Nortel Networks Preside Management System products. The firms have a longtime friendly relationship with Nortel being a pre-IPO investor in Avici. Earlier this week Nortel was named as a supplier for Verizon Communications' landline networks. Nortel's stock jumped 19 percent after the Verizon deal was announced.