With 2009 fast approaching, the second edition of TWNetwork focuses on what the future holds.

Looking globally, there seem to be three major wholesale trends:

• the access space
• backhaul
• the IP space

Access

In the access space the construction of new next generation networks – either FTTP or FTTN – is being contemplated in many jurisdictions, with cost and regulatory barriers slowing these efforts down significantly in Europe.

The old copper telephone networks which were built primarily for circuit switched voice services are struggling to keep pace with an increasingly data-driven world.

In recent years there has been massive growth in data traffic driven by emerging internet applications.  With increasing use of bandwidth hungry file-sharing applications, growing adoption of social networking sites like Myspace, and distribution of video content via YouTube, consumers are demanding higher access speeds and better connectivity to the rest of the world.

Here in Australia around 65 per cent of all internet content accessed in Australia comes from the US and Telstra has forecast that the amount of IP traffic will continue to approximately double every two years.

To address this demand, we have recently completed construction of the Sydney-Hawaii fibre-optic cable and we have started to sell access to wholesale customers looking for a reliable and robust route between Australia and the US.

To meet ever-increasing data usage trends we have expanded our wholesale DSL product suite, with the recent launch of ADSL2+ based services.

And we have also clearly signalled that we are ready to build the National Broadband Network (NBN) capable of delivering high-speed access to up to 90 per cent of Australians.

Ethernet services

The second key trend we see in the global wholesale market is in backhaul with the emergence of MPLS and VPLS being used to deliver scalable, high speed, Ethernet based services.
Recognising the critical role that Ethernet plays in delivering current and emerging Internet applications, Telstra Wholesale is continuing to develop and expand our Ethernet offerings.

The IP space

The third trend we see is also in the IP space.  While still three to five years away, we are anticipating a migration from the circuit-switched PSTN to VOIP.

We are a few years away from that mainly because we need to complete the first step which is construction of the Next Generation Networks before we complete the move over to IP.

We have been studying access products being developed overseas in developing our own proposed wholesale products for the NBN world.

Under Telstra's proposal to build the NBN:

• Telstra would invest up to $5 billion of its own capital.
• The network will be capable of providing downlink speeds between 25 Mbps and 50 Mbps in 65 per cent to 75 per cent of the footprint, with downlink speeds of between 12 Mbps and 20 Mbps in the remainder of the footprint.
• The network would be designed to be upgradeable.
• A wide range of services including IP telephony, high-speed internet, IPTV, video-conferencing and telemedicine would be supported.
• A $29.95 per month entry level 1Mbps retail broadband pricing plan (four times faster than the existing plan at the same price) for customers with a Telstra fixed line telephone service would be available.

If we don’t win the NBN tender I will still be selling access, but with much more limited opportunities for new products and future differentiation for our customers.

As we head into 2009 and ever more interesting times, all of us at Telstra Wholesale would like to wish our customers a happy and safe festive season and we look forward to working closely with you in the new year.

Kate

Kate McKenzie
Group Managing Director
Telstra Wholesale