Nortel wins big in Telstra DMO deal

Nortel Networks has emerged as a significant winner in the tendering process for Telstra's mammoth Data Mode of Operation (DMO) project, ending months of speculation.

Gerry Moriarty, managing director of Telstra's network and technology group, last week announced a series of contracts and winners, the first announcement of which was expected in April.

In the multimillion dollar project, which will see the construction of a single core network to provide integrated voice and data services, Nortel will provide core network infrastructure including Internet Protocol (IP), frame relay, ATM and Telstra Access Server solution technologies as well as system integration. According to officials, the deal is estimated to be worth between $US100 million and $200 million.

Reg Bird, president Nortel Networks Asia South Pacific, said, however, "these are the preliminary estimates . . . if anything they are probably conservative.

"It's worth an awful lot to us," Bird said. "And these numbers keep changing as the market demands change and I think, if anything, from my experience, you usually underestimate the amount you're going to get out of it."

According to Bird, Nortel already works closely with Telstra on a number of other projects including its CDMA (code division multiple access) mobile network and high-speed wireless Internet services.

Other suppliers selected for the DMO project include early strong contenders Cisco and Alcatel. The pair missed out on a major slice of the pie, but will supply key voice over IP technology, officials said. In addition Alcatel is also providing the next-generation network management solutions.

Lucent Technologies has been selected to provide both the dial-in gateway and associated signalling gateway technologies.

Greg Fidler, Telstra's project director, said the carrier originally considered working with a single supplier.

"We looked to source everything from a single supplier, but we were better placed to follow a best-of-class model. It was a better solution for Telstra," Fidler said.

Despite being selected for only a portion of the project, Bird said Nortel was confident it could handle the entire project.

"But I think what they did was look at all the various suppliers who are out there and, in their wisdom, chose the ones they thought could best meet certain aspects" where they believed the suppliers had strengths.

"We were just pleased to get what we got, but you always would like to get more," he said.

Many of the selected suppliers are already working with Telstra on the provision of equipment, but newer technologies such as network-based virtual private network (VPN) and DSL (digital subscriber line) offerings will be introduced at a later date, he said.

Despite delays in the announcement due to a new sourcing process at Telstra, as well as industry consolidation, Fidler said there will be no impacts on the project.

"The delay won't impact on the rollout. We're aware of the constraints we have in expanding the network for current products."

Fidler also said announcements relating to spin-off projects into hybrid fibre coaxial and DSL as broadband access technology will be made later in the year.

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