Telstra signs multimillion-dollar deal with rail company

Telstra has signed a multimillion-dollar contract with the Australian Rail Track Corporation (ARTC) to provide the 8,500km national freight network with high-speed telecommunications services for the next 10 years.

The deal will provide the ARTC with voice and data capabilities to run its Telstra-powered, government-funded National Train Communications System (NTCS) for maintenance and supply, as well as furnishing the rail company with a platform to develop further real-time geolocation data analytics applications into the future.

Telstra has purpose built over 70 base stations along the train network's route to provide 3G voice and data, backed up by an Iridium-powered Telstra satellite service as a secondary form of communications.

"Together with the ARTC's vision for rail innovation and Telstra's agile communications network, we have co-created a mobile and cloud-based solution that will help move the national rail freight sector forward," Telstra's chief customer officer of Global Enterprise and Services, Martijn Blanken, said on Tuesday.

"The communication network is built on our world-class Telstra Next G network, and supported by our satellite offering, so ARTC has the peace of mind that we can provide redundancy for any black spots along the rail corridor. We have also transitioned ARTC into a private cloud environment, built on VCE Vblock, which will significantly reduce the resources it needs to host the applications the NTCS runs on."

NTCS provides both everyday and emergency communications across freight train networks, particularly the interstate and Hunter Valley networks. It also designed and supplied the 704 units of in-train communications equipment for train companies to install on their motive power units.

The contract with Telstra marks the ARTC's switch from using a private telecommunications infrastructure to a public network -- making it the first railway operator to do so in Australia.

The ARTC said it had only recently switched off its analogue telco network in December last year, and is now unifying communications for trains, train controls, trackside workers, and wayside equipment within a single system for freight trains on all rail networks nationally.

"The Telstra-based NTCS will provide a platform for many of the new and exciting innovations being developed by ARTC," said ARTC CEO John Fullerton.

"Using the Telstra Next G network, applications such as safe travelling distance technology (proximity alerting), real-time locomotive tracking, sophisticated track and wayside monitoring technology, situational awareness systems, and the next generation of train management -- the Advanced Train Management System (ATMS) -- all become possible.

"Today demonstrates the strong relationship between the ARTC and Telstra, which is helping drive further innovation, standardisation, and interoperability within the national rail freight sector."

While the ARTC will be using Telstra's Next G 3G network, the telco's national 4G network now provides coverage to 94 percent of the population, and is continuing its 4G network expansion in order to service 99 percent of Australians. As of the end of the financial year, Telstra has 7.7 million 4G devices on its network.

Telstra earlier this month announced its results for FY15, reporting a net profit after tax of AU$4.29 billion, down AU$260 million or 5.8 percent year on year from last year's AU$4.55 billion. Earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased by 3.5 percent, down from AU$11.1 billion to AU$10.7 billion.

"The 2015 financial year saw Telstra continue to perform strongly, growing revenues, adding fixed and mobile customer services and continuing to invest in our network advantage," CEO Andrew Penn said in a statement.

The telco noted that growth will increase next financial year thanks to the launch of its AU$100 million "Telstra Air" national Wi-Fi network in June. Last month, during his inaugural keynote address as new CEO of Telstra, Penn also committed to increasing the company's mobile network capex by investing AU$500 million into it over the next two years.

The value of Telstra's deal with the ARTC has not been disclosed.