Herefordshire County Council aims to be the first local authority to introduce a county-wide voice over IP system.
The deployment will boost joined-up working across the county's public sector organisations and will deliver substantial savings on networking and telecoms bills, the council said.
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The council has signed a deal with Siemens Communications to update its Lan and Wan infrastructure VoIP to link 2,100 council officers, all 105 schools in the county and 10 libraries.
The single data and telephony system will replace three different networks currently used by the council, said Herefordshire County Council's head of ICT, Julie Holmes.
Siemens will begin laying cables connecting the 200-plus sites next month and complete the process by April next year.
Every local authority property will get connections with minimum data speeds of 10Mbytes.
The council predicts large revenue savings as its many end-users migrate to the new network.
Holmes said she was expecting savings of "multiple millions over the next three to four years".
Siemens Communications' account manager for government vertical markets, Hadyn Dunant, said, "Just by introducing a VoIP solution that embraces those remote locations automatically makes them one body. It must introduce efficiency savings."
According to Holmes, the network deployment is top IT priority for 2005. The network improvement follows Herefordshire's implementation of an SAP Enterprise 4.7 procurement function over the summer.
The Herefordshire VoIP system will run on Cisco hardware and Siemens' Hipath DX and Hipath 4000 communications servers.
The service will be monitored from Siemens Communications' network operations centre, which is based in Wellingborough.
The council's call centre runs on Siemens' Hipath Procenter system.