Under the agreement, IBM will act as the "strategic technology partner" for Lloyds TSB as the bank moves to a national dedicated high-capacity fibre, DSL and MPLS network supporting both voice and data communications. The network integration and management will be provided by Vanco, and will include technology from a variety of carriers to provide connectivity to all Lloyds TSB branches and cashpoint machines.

Vtesse Networks, a gigabit optical networking provider, will supply the fibre network, while Cisco will supply the VoIP phones.

Lloyds TSB currently operates a traditional voice infrastructure, including PABX switches, PSTN, RAS, VPN and managed services with approximately 30 supplier contracts, with the largest share of the business held by BT and C&W.

The current Lloyds TSB WAN is deployed solely to support data traffic - no voice convergence exists. Although historically the network has supported many legacy protocols and technologies, today’s network is an IP/Ethernet only environment, with the main focal point being the principal data centres.

The new infrastructure, which will be rolled out over the next 20 months to approximately 2500 branches and 1000 other UK sites, will feature a single network for voice, data and video with direct links to mobile and call centre services.

The new fibre core will supply almost limitless bandwidth, allowing Lloyds TSB to consider alternative Web-based or bandwidth-hungry applications that would not previously have been viable.

Efficiency gains are also expected in network branch connectivity, with projections for an expected eight-fold increase in throughput for approximately a quarter of the previous overall cost.

Wayne Churchill, managing director, Vanco Northern Europe, says: "We view this deal as an important first step towards releasing the carrier stranglehold on the financial services market. Our teaming with IBM will change the telecoms market for the benefit of the financial industry and the clients they serve."