Avaya and Verizon Collaborate on Sales and Service To Rapidly Expanding Small and Medium Business Market

NEW YORK -- Avaya (NYSE: AV) and Verizon (NYSE: VZ) have agreed to collaborate in offering to small and medium sized businesses a suite of communications solutions that include systems, applications and services from both companies.

The companies will bring to market integrated hardware, software and service offers that simplify the overall service packages smaller businesses use while leveraging the growth in small business data usage and opportunities for voice/data convergence. The approach and alliance brings together two companies that are leaders in their respective markets in delivering dependable, innovative, cost-effective communications solutions to small, medium and large businesses. Together, they are offering those businesses one-stop shopping from Verizon for various communications needs.

Under the agreement, Verizon will offer two suites of Avaya products to the small and medium business market - both single and multi-site - in retail and wholesale trade, transportation, and other industries. The product lines Verizon will offer include:

• Avaya IP Office, which is an "all-in-one" office communication solution that brings together voice, data and communications applications for small and mid-sized businesses and includes applications such as mobility, customer contact centers, and conferencing features. Avaya has sold more than 38,000 IP Office systems for businesses worldwide.

• PARTNER^® Advanced Communications System, which is a key system with advanced telephony features such as email and voice mail access and management from a single PC mailbox, and connectivity to digital subscriber lines (DSL) for high speed Internet access and voice over DSL. There are more than one million PARTNER systems in operation worldwide.

The companies said their collaboration will enable additional small and medium companies to enhance their operations with advanced telephony applications. According to Access Markets International (AMI) Partners, an industry analyst firm which specializes in the global analysis of IT, Internet and telecom trends in the global small and medium business market, spending on IT and telecommunications among small and medium businesses worldwide is expected to grow more than seven percent annually, and exceed $1.1 trillion by 2008, with IP telephony spending among small and medium firms worldwide estimated to grow more than 40 percent annually and exceed $4.5 billion by 2008.* In the U.S., small and medium businesses, on average, are spending almost seven percent more on IT, which includes hardware, security, and information management software.**

"Small and medium businesses want and need the communication tools that big businesses enjoy today and, particularly in IP telephony, these firms are beginning to realize the benefits IP brings, beyond simply reducing telephony costs," said Mike Lauricella, vice president, telecommunication research, AMI-Partners. "This alliance, with Verizon as the service provider for millions of businesses and Avaya as a leading software and hardware supplier to small and mid-size firms, enables Verizon and Avaya to share the knowledge they've gained and play off each other's expertise. As a result, more small firms will be able to get tools that can help them increase productivity and better serve their customers."

Verizon's sales teams will facilitate sales, and Avaya and its distributors will provide training and support for the sales teams. Avaya Global Services, the company's worldwide services organization, will be responsible for customized installation and maintenance support through the company's 24 Network Operations Centers and 13 Technical Centers. Avaya distributors will be responsible for inventory and logistics. Distributor Catalyst Telecom is working with Verizon and Avaya as part of the agreement announced today.

"The Avaya products are an excellent complement to Verizon's network services," said Kathy Koelle, senior vice president - sales & marketing for Verizon's business solutions group. "The PARTNER key system is a compact yet powerful solution for small firms, and the IP Office solution offers an easy migration path to companies considering converged voice and data solutions."

Pat Hume, group vice president, small and medium business solutions, Avaya, said: "Communications is at the heart of every business, no matter what size. With Avaya's voice heritage and data expertise focused on the enterprise, combined with Verizon's strong sales channel, we're opening the door to a greater number of small and medium businesses that realize the importance of communications and want access to innovative technology, advanced features such as mobility, sophisticated applications such as contact center solutions, and more, designed especially to enable them to work smarter and more effectively."

About Avaya

Avaya Inc. designs, builds and manages communications networks for more than 1 million businesses worldwide, including over 90 percent of the FORTUNE 500^<®>. Focused on businesses large to small, Avaya is a world leader in secure and reliable IP telephony systems and communications software applications and services.

Driving the convergence of voice and data communications with business applications - and distinguished by comprehensive worldwide services - Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya website: www.avaya.com.

About Verizon

Verizon Communications Inc. (NYSE:VZ) is one of the world's leading providers of communications services. With a diverse work force of approximately 208,000, Verizon has four business units: Domestic Telecom serves customers based in 29 states with wireline telecommunications services, including broadband, nationwide long-distance and other services. Verizon Wireless owns and operates the nation's most reliable wireless network, serving 42.1 million voice and data customers across the United States. Information Services operates directory publishing businesses and provides electronic commerce services. International includes wireline and wireless operations and investments, primarily in the Americas and Europe. For more information, visit www.verizon.com.

^{*"The SMB Global Model," Access Markets International (AMI) Partners, 2004}

**"Small and Medium Business Strategies," The Yankee Group, 2004

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