BOSTON - Reduced telecom costs, easier network administration and the promise of less expensive, more responsive disaster-recovery operations convinced Fidelity Investments it could wean itself from traditional Centrex services and move to IP PBXs.

The financial services giant is one of the larger Centrex users in the country, with more than 11,000 phone lines, but it has begun a large-scale voice-over-IP (VoIP) implementation and now uses approximately 600 Cisco IP phones. This year Fidelity expects to add 700 more IP phones and 3,500 softphones, which were built in-house.

Fidelity is but one of many large corporations making the move from Centrex to VoIP. Carriers have lost 1.8 million lines and more than $1 billion in Centrex service revenue since 2000, when the IP PBX market emerged, according to telecom research firm RHK.

The plan at Fidelity is to move all voice traffic in its Boston headquarters to the company's Cisco-based Gigabit Ethernet metropolitan-area network (MAN), which links four buildings with gigabit-speed connections. Redundancy built into the Cisco IP-based MAN will provide faster disaster recovery at a lower price than Centrex. The only additional cost would be for the extra 50M to 70M bit/sec of additional IP voice data on the MAN, said David Morgan, vice president of architecture and planning for Fidelity, who outlined the company's VoIP plans at a recent IP telephony conference.

One of the most important facets of Fidelity's move is supporting crucial disaster-recovery operations. "Right now we have fairly expensive and complicated disaster recovery," Morgan said. "We can provide better disaster recovery with VoIP."