Telstra results reveal growing importance of Next IP

Stuart Corner
Thursday, 13 August 2009 07:25

IT Industry - Strategy

Telstra's annual results show the financial impact of Next IP, the new end-to-end IP network across which all services will be delivered, with Telstra reporting that IP access revenues now exceed those from legacy data services.

Earlier this week Telstra was busy talking up the importance of Next IP. Today, announces its annual results, it says "IP access is a large and fast growing part of our enterprise and government segment with revenue growing by 23.3 percent to $583 million and a large proportion of our IP customers take value-added products such as IP security, IP telephony and hosting services."

In contrast specialised data revenue declined by 9.0 percent to $628 million, "due to the continued migration to IP based products." Telstra said that digital data services, frame relay and leased lines had declined most and that "the fall in specialised data revenue has been more than offset by increases in IP access revenue." It added: "Furthermore, the second half of fiscal 2009 saw IP access revenue exceed revenue from specialised data for the first time."

Enterprise & Government customers accounted for the bulk of IP access revenues which, overall, were up 24.1 percent to $667 million. Overall IP and other data access revenues grew 8.1 percent to $1.733 billion. Within the IP access portfolio, IP metro area network (IP MAN) was the largest contributor with $321 million of revenue, representing growth of 37.8 percent.

Telstra described IP MAN as "a high bandwidth, flexible IP access service that has grown at double-digit rates for many years, due to upward bandwidth migration from customers (predominantly in the Government sector) IP wide area network (IP WAN) also grew strongly, by 18.7 percent to $216 million.

According to Telstra, "IP WAN allows businesses to use a single data connection in each location and then rely on the built-in intelligence and security of our Next IP network to manage the routing and delivery of data between locations within Australia and internationally."

Customer growth was also strong in both the IP MAN and WAN products with 17,000 IP MAN and 81,000 IP WAN SIOs at the end of the year.