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Cisco, SBC Team Up on Data Services

April 19, 2000

DALLAS (AP) _ Computer network equipment maker Cisco Systems Inc. will jointly develop and sell data services with Southwestern Bell’s parent, SBC Communications Inc. in what the companies call a multibillion-dollar alliance.

In the agreement, San Antonio-based SBC will also buy more of Cisco System’s equipment for its telephone networks, according to The Dallas Morning News’ editions today.

The report said a close relationship with SBC, the nation’s largest local telephone company, could raise San Jose, Calif.-based Cisco’s profile as a vendor to such companies in its expansion bid in the network business against larger suppliers including Lucent Technologies and Nortel Networks.

``Customers often say, `I want the speed and innovation of the Internet and I want the scale and reliability of the telephone network,″ Larry Lang, vice president of Cisco’s service provider business, told the newspaper. ``Given the backgrounds of the two companies, we have a unique ability to provide that to customers.″

Executives of SBC, as part of the deal, said they would use Cisco’s digital subscriber line access equipment as they add high-speed data capability in the he Midwestern markets served by Ameritech Corp., which it acquired last year.

Alcatel, the largest DSL supplier and until now SBC’s sole vendor, was the loser.

Earlier this month, Cisco announced it had invested $60 million in an Austin-based startup that sells high-speed data services to business customers in small and medium-sized cities.

By October, Vectris Communications plans to operate in 10 states served by Southwestern Bell and Ameritech. A key part of its business model is to capitalize on competition-enhancing steps that Southwestern Bell’s parent, SBC Communications of San Antonio, had to grant to win regulatory approval for its purchase of Ameritech.

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