Telecom network a big deal

By ADAM GIFFORD

Telecom New Zealand has signed a multimillion-dollar deal with networking technology giant Cisco Systems to buy a national internet-based communications network that will form the basis for a new range of web protocol services.

Cisco spokesman Tim Hemingway said the deal was the largest the United States company had done in this country.

Cisco will use its MPLS (Multiprotocol Label Switching) technology to build Telecom a virtually private network.

Telecom is expected to start offering services after mid-year.

The network will be carried on Cisco switches distributed around the country on Telecom's existing ATM (Asynchronous Transfer Mode) network.

Mr Hemingway said Telecom would be able to reduce capital and operational costs because it no longer needed to build multiple overlay networks to carry internet protocols.

It would also cut down on spending needed for expensive traditional circuit switches as more traffic moved to the internet.

He said AAPT Australia, which Telecom has a controlling interest in, had similar switches that could eventually be used to build fully integrated transtasman networks.

Brian Davey, of Telecom, said internet protocol allowed companies to offer customers and suppliers flexible and secure access to their networks.