Out of Asia: Telstra expands IP network globally

Little-known Telstra Inc., the New York-based U.S. subsidiary of Telstra Corp., Australia’s leading carrier, recently outfoxed more than a dozen global ISPs to win a three-year, $8.4 million network outsourcing deal from Hyatt International.

Telstra is providing Hyatt with high-speed IP connectivity between its Chicago headquarters and 50 hotels located throughout Europe, Asia Pacific and South America. Hyatt’s new network also links several shared service centers that handle key business applications such as reservations and accounting. Telstra gives these applications priority using Multi-protocol Label Switching (MPLS), an emerging protocol used to provide different classes of service.

In the last issue of the ISP News Report, we talked to Hyatt’s top telecom executive about why he chose Telstra. Today, we’ll take a closer look at Telstra’s IP network and capabilities.

Telstra Corp. is a top-tier ISP in Australia and across the Asia-Pacific region and provides a range of IP services including broadband, MPLS, VPN and managed services.

The company says it is the 13th largest carrier in the world, ranked by market capitalization. Altogether, Telstra has net sales of more than $15 billion, and has the backing of the Australian government, which owns a majority stake in the ISP.

Telstra has ownership in a variety of networks including Infonet, a top-tier ISP in the U.S. Telstra’s network reaches 60 countries directly or through ownership arrangements, and another 190 countries through relationships with other service providers.

Few U.S. network executives realize the extent of Telstra Inc.’s capabilities in North America. The U.S. subsidiary has 10 IP POPs in the country, with two each in Silicon Valley, Los Angeles and the New York City area. These POPS are owned and managed by REACH, a wholesaler of which Telstra has 50% ownership. Telstra has access to an additional 18 POPs in the U.S. through its stake in Infonet.

“You think of us as being a big Australian or Asian/Pacific carrier, but we’ve had a global strategy for the last three years,” says Dan Kerth, president of Telstra Inc. “We’ve been servicing multinationals in and around Asia for years. But most of these multinationals have their headquarters here in the U.S….and they expect connectivity back to the U.S.”

Telstra’s forte is still in Asia, where it has been operating for more than 50 years. Telstra has local POPs and networks in all the major Asian markets, and it supports regional offices in Hong Kong, Tokyo, Beijing, Singapore and three cities in India. Indeed, a recent Gartner/Dataquest study ranked Telstra the leading capacity provider of all carriers in the Asia Pacific region.

Telstra’s strength in Asia is becoming more important to U.S. companies as they outsource manufacturing, telemarketing and other services to such countries as India and China. Hyatt International, for example, complimented Telstra for its speed in provisioning new services in Beijing.

“Telstra had to meet Hyatt’s requirements of provisioning within 40 days,” says Mark Retnam, director of global communications technology for Hyatt International. “Telstra met this challenge, helping Hyatt avoid the overlapping costs of vendor transition and the complexity of interim solutions.”

India, in particular, is a hot topic for U.S. network executives. Telstra has offices in Mumbai, Delhi and Bangalore in India.

Kerth says Telstra can more quickly provide customers with services to places in India where it would take other suppliers up to 120 days to get services. “I can put in DS-3 service from Singapore to Bangalore or Mumbai in less than 45 days. We’ve done that for a retail company,” he says.

Other locations where Telstra says it has an edge are in the Philippines, Indonesia and Malaysia. Service to Vietnam is coming soon.

Telstra officials say the company’s greatest strength is its ability to coordinate support for its customers globally. “It’s not uncommon for us to work on global accounts from three offices – say France, Singapore and the U.S., – all simultaneously,” Kerth says.

For Telstra, winning the Hyatt deal is another feather in its cap – one that it wants to crow about.

“We’ve been quietly going about our business. We’ve been able to provide global networks for several years, and we haven’t gone out and told anybody that we can do it,” Kerth says. “We’ve now hit the stage in our global business that we need to tell people that we’re here.”