In defiance of the logic of its parent STC Plc’s rapidly strengthening ties with Northern Telecom Ltd, ICL indicates that it will be moving closer to Mitel Ltd in the field of PABXs. ICL has a basic OEM agreement with Mitel, the Canadian company that is now 51% owned by British Telecom, which covers all ICL’s major markets, whereas the recent purchase by STC of the UK telecommunications business of Northern Telecom gives STC only UK rights to the SL-X rival to Mitel’s SX2000 private exchange. To date ICL and Mitel have sold through completely separate channels, but are to proceed with an existing plan to pool their marketing efforts by a system of cross-referencing, which will channel distribution down one route. ICL vertical market sectors will receive direct access to Mitel technical specialists. A source close to the negotiations said that the new arrangement, the fruit of six months of discussions, is ‘imminent’ and will go ahead despite STC’s rights to the competitive PABX range in the UK. This closer collaboration between the two parties will be viewed with surprise by industry observers who were predicting that ICL would abandon its Mitel product in the wake of the STC deal with Northern Telecom. The other key UK distributor of the Mitel SX2000 is British Telecom itself. Telecom’s trading links with Mitel have been curbed in the past by the Monopolies and Mergers Commission on the grounds that its 51% stake in Mitel put it in a position to dominate the market. Since the announcement that GEC and Plessey are to merge their telecommunications interests, Telecom has been seeking to relax these restrictions. GEC’s Reliance PABXs are built under Northern Telecom licences, and Plessey has its own ISDX, but the partners insist that both lines will be marketed by the planned GEC-Plessey Telecommunications.