TOT Inks $4m IP Network Deal With NEC, Mitsui

NEC Corp. and Mitsui & Co. recently received an order worth 400 million yen (US$4 million) from the Telephone Organization of Thailand (TOT), for the world's first nationwide IP (Internet Protocol) network project.

In conjunction with existing public telephone networks, this project will create IP networks, enabling the TOT to offer customers low cost, high quality IP telephone services and enhanced Internet access. Due to the explosion of the Internet, there is a need to employ inexpensive IP-based telecommunications networks, in contrast to the existing voice-based telephone networks based on switching equipment, which is able to guarantee quality, but was not designed for the large transmission requirements of the Internet, an NEC statement says.

The TOT intends to eventually offer its own ISP service as well as providing leading IP telephony services to ensure it maintains its position, while building a modern communications infrastructure base for its customers. Users will benefit from the network by receiving reduced rates on long-distance calls (half the price of current tariffs). Users will also be able to access the system through existing telephone networks and switching equipment.

The IP network will initially connect metropolitan Bangkok with 20 other cities in rural areas. In terms of equipment, the project comprises hardware and software for ISPs, such as gateways for IP telephony, remote access servers, routers, LAN switches and various servers.

NEC's role will be both as a solutions provider and systems integrator.

Services are due to start from January 2000, with 3,240 ports being used to serve 100,000 subscribers. A good deal of equipment from Cisco Systems, including routers, switches, access servers and voice gateways are set to be utilized for the project, according to sources at Cisco Systems (Thailand) Ltd.

In the second stage, TOT plans to expand the system significantly. IP over ATM (asynchronous transfer mode) will be implemented at this stage. TOT aims to also enhance its services by increasing the number of base stations as the number of IP telephone users increases. Thailand will become a model, watched closely by the industry, given that this is the first country where IP telephony is to be introduced on a nationwide basis.

According to a telecoms analyst at a foreign brokerage in Bangkok, this is unlikely to prompt any downgrades in the telecom sector for the time being, since it will probably take between one and two years for the services to become widely available to the public.

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