Nortel Networks Corp. has acquired a 3D positional voice technology vendor.

The Brampton, Ont.-based telecom equipment maker announced Thursday it will acquire all shares of DiamondWare Ltd. Of Mesa, Ariz. for $7 million in cash.

DiamondWare’s technology, which uses wideband, stereo and custom spatial positioning, has been used in both video games and military intercom systems.

Nortel officials said DiamondWare’s technology will “give Nortel’s customers a more natural and immersive communications experience” in both conference applications and virtual world environments.

Founded by Keith Weiner and Erik Lorenzen in 1994, the company first made a sound and music component for multimedia and game developers. It then developed products for audio chip makers and digital signal processing companies.

DiamondWare also makes the “Media Stack” software components for voice over IP applications, which include a telephony sound tool kit and a dynamic jitter buffer that takes VoIP packets that are out of order and puts them back in their proper place.

Notel plans to use DiamondWare’s technology in both its carrier and enterprise products, including multimedia, voice conferencing and voice over IP.