Marks and Spencer (M&S) is to use voice-over IP (VoIP) technology to reduce internal communication costs.

The high-street retailer has extended on its outsourcing contract with Cable & Wireless (C&W) to run its national voice communications network until 2012, for an undisclosed sum.

C&W will also develop and deploy a network upgrade to M&S's IP-based wide area network (Wan) that will converge call traffic over a virtual private network, cutting the cost of connecting stores, offices and distribution centres to a fast, reliable and secure internal system.

'This contract provides Marks and Spencer with the flexibility to grow our communications infrastructure in line with our business requirements, while demonstrating significant cost savings,' said Alastair Tipple, M&S chief information officer.

By effectively making calls over its internal IP network free, the retailer is hoping to reduce call costs by up to 25 per cent, according to Richard Baker, head of voice at Cable & Wireless.

'One of retailers' main requirements is agility, and this contract will deliver this to the network behind Marks & Spencer's business, linking the central office directly to point of sale, giving real-time access to information and end-to-end logistical access. It's all about allowing it to know sooner and act faster,' he said.

The network will also cut the cost of moving telephony for relocating employees by removing complexity from managing the M&S telephony estate, including directories and databases, by using central hosting and management capabilities.

As the retailer moves its voice traffic onto the Wan, C&W will manage and maintain a secure perimeter around the network and its data centre infrastructure for all call services.

M&S ranks among the top five UK retail customers for C&W.

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