Telstra work worth a few billion less to Alcatel

In November, Telstra announced an AU$3.5 billion memorandum of understanding with Alcatel as part of the telco's next-generation network transformation project.

However a large chunk of that deal was Telstra's now defunct fibre to the node broadband network.

"Telstra and Alcatel today announced a works program for Telstra's fixed network transformation in 2006-07, which has an expected value of AU$460 million," said a joint statement issued by the two today.

"The works program is part of Alcatel and Telstra's strategic supplier relationship announced in November 2005."

Telstra and Alcatel had always stipulated the finalisation of the deal depended on getting what the telco described as "reasonable regulatory outcomes" from the federal government, particularly on the fibre to the node network. The memorandum of understanding additionally needed to be finalised into contractual arrangements.

Alcatel's involvement in the next-generation network project is now limited to helping establish an "Internet Protocol network footprint" in Melbourne, Sydney, Brisbane, Perth and Adelaide.

The vendor will supply and deploy hardware including DSL Access Multiplexers (DSLAMs) and Ethernet aggregation and optical networking solutions.

Telstra's executive managing director of Network & Technology, Dan Burns, said some of the work had already commenced.

"Since announcing its transformation strategy in November 2005, Telstra had made solid progress in its move to a next-generation fixed network -- Telstra connected its first customer to Alcatel's IP-DSLAM technology earlier this year," he said in the statement.

"These upgrades are important for future-proofing our network over the next five to 10 years, to provide customers with access to offerings such as high-speed Internet, telecommuting, video conferencing and video delivery of services in general."