Telecom major Nortel has announced that it will set up a research and development centre in Bangalore to focus on new product design, development and testing to deliver greater cost benefits to customers worldwide.

Located in the IBC Knowledge Park, the Nortel Technology Excellence Centre spread over 35,000 square feet, will employ 100 engineers by 2006 end.

Activities at the centre will build on Nortel's existing capabilities in advanced routers, ethernet switching, security and VoIP technologies.

Nortel is among the very few companies that spend around 20 per cent of their revenues on research and development. The company spent $1.9 billion in 2005.

The NTEC will be led by K C Venugopal, founding member of Tasman Networks, a leading router company, which was acquired by Nortel in February 2006. The centre will initially house Tasman's original secure router R&D team, already based in Bangalore.

"India has long been a technology hub for Nortel, providing a major opportunity for local technology and innovation to be deployed in global markets. This new R&D facility will complement our current enterprise infrastructure portfolio," Nortel India managing director Ravi Chauhan told a news conference on Tuesday.

The NTEC, Nortel's first R&D centre (12th worldwide), will incorporate feedback from customers to enhance networks that support critical real time applications, including voice, video and streaming multimedia.

"This is a tremendous opportunity to strengthen Nortel's base in India and to differentiate our enterprise portfolio to gain competitive advantage," Chauhan contended.