Nortel this week said Bell Canada will invest $146 million over three years in Nortel products to provide enterprises with IP telephony and multimedia applications and services.Nortel\u00a0this week said Bell Canada will invest $146 million over three years in Nortel products to provide enterprises with IP telephony and multimedia applications and services.The arrangement between Nortel and Bell Canada includes a joint research and development initiative. The so-called "Innovation Centre" in Ottawa will concentrate on creating IP telephony and multimedia services, and work with third parties to encourage compatibility and market timeliness.Bell Canada also plans to establish associated research and development satellite labs in Quebec, Ontario and other areas.Analysts say the project, though not huge financially, is nonetheless significant, if prudent."The deployment by Bell Canada and the commitment to construct a joint research facility with Nortel is the strongest endorsement to date of hosted IP telephony by a major service provider," says Joe McGarvey, an analyst with Current Analysis. "Nortel\u2019s nearly $150 million commitment from Bell Canada represents a benchmark in the IP Centrex segment of the industry. At the same time, competitors can point out that Bell Canada has been evaluating the technology for a considerable amount of time and the rollout is conservative in that it does not call for the carrier to replace portions of its traditional phone network."The Innovation Centre's work will support both wireline and wireless facilities. New services spawned by the effort will be designed for a hosted IP network, in which Bell Canada will build and manage the infrastructure on behalf of its customers.According to Nortel, the Innovation Centre will "complement and extend" the work of Bell Canada\u2019s iTechCentre, a $37 million lab established in 2001 to test IP-based technologies and services.Bell Canada currently uses Nortel digital telephony gear. Bell Canada Enterprises sold its 35% stake in Nortel in 2000 after a century-long association.Despite the deep roots, Bell Canada entertained bids from 35 vendors for this project, so it was not a slam-dunk for Nortel, according to Al Safarikas, Nortel vice president of marketing."It's like a car salesman: selling to your brother is harder than selling to anyone else," Safarikas quipped.Bell Canada will extend its Nortel infrastructure with the company's Multimedia Communication Server (MCS) 5200, a SIP-based media server for multimedia applications; and its Succession Communication Server 2000 softswitch. The project represents the largest deployment to date of Nortel's MCS.Bell Canada customers will be able to access video calling, unified messaging, single directory and other services with this deployment.Service availability is scheduled for mid-2004.