Telstra plans to respond in a "measured way" to the competitive threat posed by voice over Internet protocol services, with the maximum net revenue effect on the carrier over the next 18 to 24 months "unlikely to be material" to its traditional voice revenues, senior Telstra executive Ted Pretty said today.

In a briefing to analysts in Sydney this morning, Pretty described the telecommunications heavyweight as "well advanced" in plans to deploy in early 2005 advanced soft-switch technology to support provision of the latest voice over Internet protocol services.

"While voice over Internet protocol has been described as a competitive threat for Telstra, the company will respond in a measured way," he said. "We believe the maximum net revenue effect on Telstra over the next 18 to 24 months is unlikely to be material in the context of our traditional voice revenues".

Rather, the volume of voice traffic within Telstra's core network carried via packet technologies such as Internet protocol would increase gradually over the next three to five years as additional network capacity was added and as a means of lowering operating costs.

The executive, who heads the Technology, Innovation and Products division, said while much work had been done over a number of years to prepare the carrier for an Internet protocol future, "Telstra will also, as a priority, continue to augment and improve the reliability of the customer access network (CAN) to support basic services, as well as the growth in ADSL broadband over the copper CAN.

Telstra also announced an AU$320 million plan to reduce fault levels in the CAN by systematically targeting experiencing abnormally high fault rates.

"The new CAN spending, which will occur over the next two to three years, will be accommodated within Telstra's broad capex guidance".

The carrier also plans to launch two innovation centres, one in Sydney and the other in Melbourne, designed to showcase newly developed technologies and products in a live environment.

A rationalisation of Telstra's networks and platforms is likely to produce expense savings of AU$110 million over the next two years.

Other measures outlined by Telstra to position the carrier to aggressively exploit growth trends in wireless, broadband and Internet protocol services included:

• the launch in the December quarter this year of new GSM-based 2.5G mobile services based on the i-mode content delivery platform;
• the forthcoming addition of new voice-activated products such as Telstra Personal Assistant, which will allow customers to leverage a network-based address book;
• a commitment to launch 3G WCDMA consumer services in 2005, either through a paced rollout or an infrastructure sharing arrangement;
• an accelerated migration to a packet-switched network, including the rollout of an IP MPLS core network as a central platform to carry voice and data traffic and support high-performance business services;
• confirmation of the AU$50 million 3G evolution data optimised on Telstra's CDMA network which, when launched later in 2004, will allow customers in major cities and some regional centres to with wireless broadband connectivity at 300-500 kbps;
• completion of rollout to 1400 CDMA base stations of 1xRTT -- which affords high-speed data services across metropolitan, regional and rural areas;
• a trial of Flarion services as a wireless broadband access product for fixed PCs in situations where cable and fixed copper solutions are not available;
• a 12-month program to extend the coverage of GSM and CDMA networks by adding 500 base stations to the more than 7,0000 base station already in the networks;
• an AU$34 million program to extend existing fibre-to-the-home trials to a number of new estates;
• further enhancements to the broadband DSL network to support speeds of up to 1.5 mb-plus for services up to 4km from an exchange;
• the successful deployment of the new BigPond e-mail platform with more than 75,000 new customers incorporated onto the new platform since 1 July.
  

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