AARNet gnaws at Telstra's education market

In a clear case of one majority government-owned data service provider cannibalizing the business of another, Southern Cross University (SCU) in northern NSW will migrate from Telstra to AARNet in October to reduce costs and increase bandwidth.

A spokesperson for CIO Maria Gillam's office at SCU's IT services department told Computerworld that after years of "restricted bandwidth and high data costs" SCU is preparing to reconnect to AARNet later this year.

SCU was with AARNet five years ago but the long-haul data costs were "too high". Now, with the next generation of AARNet - AARNet3 - operational, SCU's three main campuses are at most a 5km "tail" away from the fibre backbone.

"The move [to AARNet] is a huge step up for SCU in respect of capacity available to its researchers," the spokesperson said. "For the first time SCU will have access to national and international education and research facilities equivalent to that of metropolitan universities."

Although reluctant to say how much the university is likely to save as a result, the spokesperson said it will achieve "substantial cost savings" in data and voice communications once reconnected to AARNet. The ROI is expected in five to seven years.

SCU also plans to reduce its Telstra phone bill by rolling out IP telephony next year. There is potential for as many as 1200 IP handsets.

"With the current barriers of cost and capacity removed, SCU will be able to exploit and make use of technologies such as VoIP, multipoint videoconferencing and grid technology," the spokesperson said. "The connection into AARNet is significant to the region, opening possibilities to the university, its partners and the education sector in general."

To coincide with the switch to AARNet, SCU is undertaking a full upgrade of its extensive multi-campus network, replacing Nortel equipment with Cisco. Work is expected to be completed by mid-August.

University of Tasmania's IT resources director John Parry said although AARNet's data services have been used for more than 10 years, its voice services will be provided by Telstra over the next two years.

The university has already started using VoIP which will give it the option of using AARNet for telecommunications.

Parry is unsure which unis have migrated data and voice from Telstra to AARNet, but said most already use AARNet for data services, and have the option of VoIP.

"A main advantage in using AARNet relates to collaborative and research opportunities with other universities through AARNet's next-generation, high capacity network," he said, adding that Utas' position is not, or was, quite the same as that of SCU.

When asked what Telstra should do to protect its education business from AARNet, Parry said: "Telstra would have to look seriously at its pricing structures and service models so that they align more with the customer needs."

AARNet CEO Chris Hancock said SCU's decision was considered in terms of its own needs and is a positive one for the higher-education sector, but he categorically denied any notion of deliberately competing with Telstra.

"AARNet consists of 37 universities and CSIRO and is pleased to assist SCU which sees it as a natural progression," Hancock said.

"AARNet is about providing services to its members and not about snatching Telstra's business."

When asked about SCU's IP telephony ambitions along with others like the University of Tasmania, Hancock said AARNet aims to stimulate greater network use and VoIP is a value-added service that is good for higher education.

"AARNet has a very clear access policy and is a not-for-profit organization," he said. "Remote and regional universities, including the University of Tasmania and Charles Darwin University, now have the same level of service as the metropolitan universities."

While not looking to service the wider enterprise, Hancock said AARNet has broadened is access policy beyond higher education and will begin pilot projects with schools and technical colleges.

Telstra spokesperson Warwick Ponder said telecommunications is a very competitive industry, particularly in the government and education sectors.

"Telstra approaches all contracts on a competitive basis and is very involved in the education sector," he said.

Ponder declined to comment on AARNet's competitive position.

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