Co-founder Sir Terry Mathews buys 90% of the PBX side of the business. This creates a new chapter for the company with the development of a new PBX family based on Internet standards for Voice over IP (VoIP), which it trades under the name of Mitel Networks. The original company retains the semiconductor division and markets it under the new name of Zarlink to reflect its interest in networking.
The manufacturing arm is spun off out of Mitel Networks to become a contractor called Brecon Ridge.
Mitel acquires Inter-Tel for 723 million creating a formidable combined business with a strength in unified communications, networking, contact centers, mobility and collaboration.