After several years of talking vaguely about plans to help rural telcos migrate their existing DMS switch to a voice-over-IP environment, Nortel Networks has finally unveiled some concrete products and its first customers. The question many seem to have now is whether the company, which claims it has 66% of the rural switching market, can maintain that dominance despite the emergence of smaller and focused competition.

Though Nortel has put a publicly rosy face on its rural market position, it's common to hear telco executives unleash tirades after mentioning the vendor's name. Nortel believes its DMS migration path proves it understands rural telcos.

The evolution begins with some software and a single rack-mounted Packet Gateway Interface along with an Ethernet switch, which interfaces with the DMS 10's 3T98 system processor.

“We're really adapting the DMS-10 and adding a very inexpensive interface,” said Dennis Couture, director of rural markets for Nortel.

Nortel is taking a deliberate approach to VoIP transitions because customers want to use existing switches as long as possible. The company said it has a total of 75 customers in the pipeline for this year and already has installed at McDonough Tel in Colcheter, Ill.; Randolph Tel in Asheboro, N.C.; and Golden West in Wall, S.D.

But, Andy Randall, MetaSwitch's vice president of marketing, said the rural market has changed significantly in the last year.

“Twelve months ago, most telephone companies were looking at cap and grow,” he said. “We've had a lot more instances over the last six to nine months of customers literally ripping out switches.”

More and more carriers also are interested in using softswitches for their ILEC territories whereas a year ago it was mostly a CLEC product, Randall said. Moreover, MetaSwitch hasn't been seeing Nortel in smaller markets over the past year, though the two have met in larger independents.

“Most of the customers we talk to recognize that this is 20-year-old technology being given a fresh coat of paint,” he said.

Nortel, though, believes it can carry its dominance in circuit switching into the IP world by focusing on natural migration.

“The migration path that we've mapped out is financially friendly to operators,” Couture said.