Late but keen - Telecom steps up to the IP phone start line

By RICHARD WOOD and PETER GRIFFIN

New Zealand's largest telecommunications company is losing some early IP (internet protocol) telephony business to nimble competition.

But it says it will soon flex its muscle through a multimillion-dollar network it is building with Alcatel and EDS.

Telecom announced last November that it had shortlisted Alcatel to upgrade its core fixed-line network to IP. The deal will go to the Telecom board for final approval next month.

IP telephony uses the same data packet technology for voice and data communications within companies and across the internet.

Additional network protocols provide the quality needed for delivering voice calls at a fraction of the cost of conventional methods.

Telecom's competitors are already embracing IP - and winning customers.

TelstraClear as TelstraSaturn started building its national IP network infrastructure with Ericsson a year ago.

The company's head of network operations, Neil Cryer, said the networks brought together by the merger of Clear and TelstraSaturn had given the company the most sophisticated network in the country, capable of delivering IP voice and data services.

"In our core network we've taken out ATM [asynchronous transfer mode] to go straight from IP to glass taking out all the hand-offs that go with it."

The process of merging the networks of the two companies - including IP Express and Speedway, the respective data networks of Clear and TelstraSaturn - was nearing completion.

TelstraClear was also setting up a new network management software suite to oversee the network.

Cryer said Clear's 7000 handset IP implementation at the Ministry of Social Development was an early sign of things to come.

TelstraClear would be supporting fully IP-enabled call centres within the year and was considering extending its fibre network into the Dunedin central business district.



But TelstraClear is only one of Telecom's competitors making progress with IP.

Two weeks ago, the Hamilton City Council went down the IP telephony path with telco Call Plus, which offers IP technology on fibre networks in the Hamilton and Auckland CBDs and claims 57 IP telephony customers.

Internet service provider ihug is also preparing to offer IP telephony services.

It is waiting for interconnection agreements to be finalised with Telecom and will use United Networks fibre cabling in the CBDs of Auckland and Wellington, starting mid-year.

Telecom chief technology officer Murray Milner said Telecom provided IP telephony to some customers, but he acknowledged that there were fewer than 10 such customers and that Telecom did not have gateways within its network to connect IP calls into the public telephone network.

He said that capability would be ready by the end of this year.

"If a corporate wishes to do it today, we will do it with them in conjunction with one of our preferred suppliers of equipment, being Alcatel, Cisco and Nortel."

Telecom's IP installations must use a standard PABX to connect out through regular phone access to the Telecom network, usually limiting IP telephony technology to within the building or across Virtual Private Networks to remote company offices.

With the new IP network, Telecom will be able to offer an IP version of its Centrex service.

Centrex typically provides PBX-style services from within the Telecom network, allowing phones in any location to appear to be on one system.

An IP version of Centrex is being tested and is expected to be ready late this year or early next.