Talnet, a 1997 Auckland startup, is showing that a telecommunications David can hit the Telecom Goliath between the eyes by using wireless network technology to offer huge cost savings. But the giant says it is not bothered.
Talnet, a joint-venture with a US company, Tal Wireless, started building its first network in Auckland in February. Its managing director, Greg Cross, says that by mid-June it will have coverage from Albany in the north to Manukau in the south. Cross was formerly chief executive of Microsoft NZ.
Talnet is miniscule compared to Telecom; it has a total staff of seven. “You don’t need lots of people [for telecommunications] any more,” Cross says.
The company uses wireless technology, similar to that of cellular networks, to offer TCP/IP networking at up to 450Kbit/s to any user site that is within 30km of its base-stations and in line-of-sight. It already has 18 rooftop stations in Auckland; space on the Skytower is under negotiation. Auckland is the first city to be networked; fifteen other centres will be added this year, starting with Wellington. All sixteen are to be linked. Satellite links are also being considered (Tal already uses satellites in far-flung African operations).
The system uses spread-spectrum and frequency-hopping algorithms, so that, to quote Cross, “nasty little people can’t intercept the signal”. Encryption (128-bit) is an option. He claims the system is impervious to atmospheric glitches.
Rates for a dedicated 64Kbit/s link start at $199 a month ex GST; Telecom’s rates start at about $480.
Deloitte & Touche’s ISC division in Auckland is using Talnet to link its office in Auckland’s central business district to its Internet service provider, Voyager, on the North Shore. Although the link is nominally 128Kbit/s, ICS can run it at up to 450Kbit/s at the moment — “the privilege of being the first customer”, says Shane Hanson, ICS’s IT administrator.
He says the parent company is green with envy about this superfast Internet service.
Talnet is also being used, at its full 450Kbit/s, to link Deloitte’s two buildings in downtown Auckland. Stick-on antennae on the windows face each other across the street. Hanson says they have had no problems with either wireless link.
He says Talnet was chosen over Telecom for one reason: price. “The difference is horrendous.”
The actual numbers for that link from Auckland to the North Shore are: Talnet — $399 per month; Telecom (a leased 128Kbit/s line) — $1450 per month.
“I can see this being a big problem [for Telecom] in the future,” says Hanson.
Telecom, though, is unfazed. The corporation’s national media manager, Linda Sanders, says the Talnet system only has a limited market because of problems like radio interference. She says it is not aimed at “the more sophisticated market that we operate in”.
“We feel it is not viable for serious data communications,” she says. “It’s horses for courses.”