Telstra and Australian Defence sign off on AU$1.1 billion contract

After months of negotiation, Telstra and the Australian Department of Defence have signed an AU$1.1 billion deal for the telco giant to build a new terrestrial communications network for the department.

The contract will support a network reaching out to 430 sites and supporting 100,000 users, not only in Australia but also overseas. It will use unified communications, video conferencing, smartphones, and tablets to connect Department of Defence personnel across the globe. The network will also integrate with the US Department of Defense's own network.

It was announced in October last year that Telstra had won preferred tenderer for the contract, beating out Optus in a tender process that commenced in April 2010. Department of Defence CIO Dr Peter Lawrence told ZDNet in February that the Department of Defence would immediately commence work on the contract once it had been signed.

Telstra's CEO David Thodey announced to the Australian Securities Exchange (ASX) on Thursday that the six-year contract will see 350 new positions created to serve the contract.

"The agreement represents the largest customer undertaking in Telstra's history, and will support military operations at home and abroad," he said.

"We will create 350 new positions to help serve the contract, including recruiting some of the nation's leading IT, network, and security experts."

Lawrence said on Thursday that the network would be central to wider strategic reforms in the department.

"This partnership will deliver Defence with robust and secure information communications technology, while creating greater efficiencies and lower costs," he said.

"The project includes a major transformation program of work, and the ongoing sustainment of Defence's telecommunications environment."

The project is scheduled to be completed in mid-2016, after which Telstra's role will switch to maintaining the network.