Telecom is readying a fast internet service for businesses that could revolutionise the market and again send its competitors off to industry watchdogs.
The telco is to offer a voice over DSL package in the first half of 2003 that will let organisations have multiple voice and high-speed internet lines inside their building connected to the local telephone loop via only one Telecom line.
“It will be voice over IP over DSL rather than a true voice over DSL product,” says Telecom’s general manager for network investment, Rhoda Holmes. DSL-based services, such as JetStream, enable fast data services over existing copper wires alongside voice links.
The implications for the Telecom’s customers and income are enormous, says Holmes. “A huge impact for the customer in terms of them looking at their IT&T spend and saying ‘If we replace both our telephony spend and our IT spend with these kinds of solutions, what does that do to our corporate model?’.”
The offering is a logical step along the telco’s journey to an all-IP network. Telecom recently signed a deal with equipment provider Alcatel and systems integrator EDS to upgrade its entire New Zealand network to IP.
AAPT, Telecom’s Australian arm, will resell a voice over DSL offering from Optus later this year. Holmes says that service isn’t technically compatible with Telecom’s New Zealand network.
“What we’ll do is use our next-generation call service, which we’ll put in with Alcatel instead of the traditional telephone exchanges. The outcome of that is that voice is embedded in our network rather than at the customer’s equipment end.”
Holmes says Telecom is considering the impact on its existing business strategy. “We’re working on the business cases at the moment.”
The chief executive of the Telecommunications Users Association (TUANZ), Ernie Newman, agrees that the ramifications for Telecom are enormous, but perhaps even more so for its rivals. “It has huge implications for Telecom, for its customers and for its competitors.”
Newman wonders whether this kind of offering would allow customers to make toll calls for a fraction of the cost. “So can I call my friend in Alaska, say, and talk for several days on a per-megabyte charge? That would revolutionise the industry.”
Newman says such a service also raises the spectre of local loop dominance for some time to come. “If this is the technology for the immediate future — a broadband connection including voice — then it cements the local loop as even more of a barrier to competition. It ties the whole package into one and makes unbundling of the loop even more important to competition than it is at present.”
Newman says competitors would find it difficult to compete with such an offering in the long-distance voice market.