The overhaul will see more than 30 company-owned stores and sites upgraded with Nortel IP telephony and digital handsets, with similar packages offered to the company's 120-plus franchise stores around the country.
Edward Hore, Bob Jane T-Mart IT manager, said the phone system was also difficult to manage.
"Across the group we're spending more than A$2.4 million (US$1.8 million) annually on communication costs," he said.
"With the move to IP telephony we're aiming to save about A$800,000 a year, which doesn't factor in the productivity savings from simplified, centralized management and reduced equipment leasing fees. Based on these figures we can expect a return on investment in eight months."
Nortel's solution includes the installation of Business Communication Manager (BCM) 200 and 400 series IP PABXs at the retailer's stores, depots and auxiliary sites, coupled with a combination of Nortel 2002, 2004 and 2007 IP handsets to the desk, supporting more than 2000 staff nationally.
"We wanted to eliminate call charges between our stores, and reduce long-distance call charges irrespective of the call location, and IP telephony was ultimately the best way to do that," Hore said.
"Should the data network go down for any reason, the phones switch back to the PSTN network, which gives us that extra layer of service resiliency."
Hore expects a 100 percent uptake of IP from the franchisees which currently lease telephone systems at a premium price.
He described the project as a massive undertaking, but said the only glitch so far was losing the rubber feet off some handsets.
Nortel Australia/New Zealand enterprise networks general manager Nick Avakian said the migration will be completed this month with the rollout to franchisees to start in the first week of June.