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Telecom's international business has signed a deal with Hong Kong-based PCCW Global's IP network.
Under the arrangement Telecom New Zealand International and PCCW Global will interconnect their networks and supply telecommunications services to each other.
Telecom New Zealand International general manager Anthony Briscoe said the partnership allowed them to provide an extensive international IP (internet protocol) network to New Zealand and Australian business customers without the need for Telecom to build its own networks.
"As we move more into IP-based technologies and certainly into IP VPNs [virtual private networks], coverage is really an important thing," said Briscoe. "To go out and replicate global coverage is frankly very expensive for very little return."
Briscoe said the deal offered Telecom the best of both worlds. "They want to use us for access into Australia and New Zealand so we can service their customers and vice versa."
Linking with PCCW allows Telecom to offer a managed IP network to its Australasian business customers with overseas offices, enabling them to run voice and data across a private network with remote access to files.
PCCW Global chief executive Marc Halbfinger said the deal with Telecom was part of the company's strategy to collaborate with global telco carriers.
No money changed hands on signing of the deal, but each party would pay the other for the traffic.
Telecom NZ International handled about 5 per cent of the world's total voice traffic, said Briscoe, with only a fraction coming to New Zealand. "It's really a trading organisation. Instead of using dollars or oil, we use minutes."
