Telstra announced in November it would build a next-generation network, with the core being supplied by vendor Cisco Systems and due to be in place by the end of 2007. Additional equipment is being supplied by Alcatel.
But while another aspect of Telstra's plans, its Fibre to the Node broadband network, is on the backburner for now due to the need to secure a deal with the federal government and the Australian Competition and Consumer Commission over access by competitors, the MPLS network construction is going ahead.
The network is expected to be one of Australia's key telecommunications assets and will affect the operation of multitudes of smaller telcos.
Cisco's local managing director Ross Fowler told ZDNet Australia in an interview last week his company's CRS-1 Carrier Routing System equipment had "absolutely" been delivered.
"We've got our services people doing the installation and systems integration, and every bit of feedback from Telstra I've had is they're absolutely delighted, the project's going extremely well," he said.
Fowler noted Cisco was subcontracting to Leighton-owned Visionstream for some areas of the work.
A spokesperson from Telstra confirmed the company was proceeding with its strategy of building the network with the aim of eventually providing more IP-based services.
According to Fowler, Cisco's CRS-1 product will give Telstra an edge. "What Telstra is doing with that IP core is going to have a huge impact on the market," he said.
"That's an investment that will see them well into the future, and position them well against their major competitors. With the CRS-1 they've got it right. These are really big core routers, and their capability of scaling and delivering multicast is unrivalled in Australia," he said.
Fowler acknowledged the development of the extremely high-end routers had been a gamble for Cisco that had eventually paid off with telcos like Telstra.
"There are very few telcos, when we've had the opportunity to offer the CRS-1, that have not selected it. Particularly the telcos that understand where convergence is heading, and where video is heading, it ends up being a no-brainer," he said.
"Usually those that don't go that way, haven't quite latched on to where the market's going."
However not all parties are as enthusiastic about the network build-out.
The Australian Telecommunications User Group, which represents major organisations with an interest in telecommunications, last month announced its intention to meet regularly with Telstra to discuss concerns about the project.
ATUG managing director Rosemary Sinclair told her organisation's annual conference that she was concerned about the impact of Telstra's move. "What are the practical effects for end users of Telstra's IP core network migration?" she asked.
Sinclair was not available to comment on whether ATUG had met with Telstra about its concerns.
The Telstra spokesperson said: "Telstra will continue to consult with many stakeholder groups -- including ATUG -- over the company's transformation program as we have to date and as appropriate."