In the face of an unprecedented demand for
Internet-based services, Telstra will commit an estimated $A1 billion to
upgrade its telecommunications network to become completely digital by
2004.
The company, a partly-privatised Australian government
communications carrier, will next year start converting all of its voice
circuits to run over the Internet Protocol (IP) on a broadband network
codenamed the digital mode of operation (DMO).
The overall swing away from voice circuits to data services at a rate of 10
per cent per month had been eroding Telstra’s revenue base, as the company
freely admitted.
“Over the next five years Telstra will retain a strong telephony focus, but
calls of the future will be made over data networks rather than a
traditional telephone network,” said Gerry Moriarty, Telstra’s group
managing director for network technology and multimedia.
What began as a blip on the radar screen a few years ago has emerged as the
new network for information, entertainment and voice services. In 1994
Internet traffic was only 1 per cent of the size of voice traffic on
international links. By 1998 it had grown by about 10 per cent per month or
100 times in four years, to equal or exceed voice traffic on these links.
The DMO project will involve one major supplier, to be chosen from a list
of eight that were issued requests for proposal last week.
Contenders are thought to include Cisco Systems, Nortel, Alcatel, Ericsson
and the only local supplier, Jtec.
The new network will supplant Telstra’s existing analogue copper-based
Public Switched Telephone Network (PSTN), which the company had been trying
to improve for data services by digitising its telephone exchanges.
The announcement comes directly after a series of disagreements with
Internet service providers (ISPs) that had been using parts of the PSTN to
run HDSL connections, which Telstra tried to prevent by saying it could not
guarantee end-to-end analogue connections for those ISPs.
The Australian Communications Authority has also recently been “declaring”
many of Telstra’s existing networks, like its OnRamp ISDN network and the
PSTN, meaning that other telecommunications providers and ISPs have a much
stronger bargaining position in negotiating process for reselling services
across those networks.
