NEXTEP is currently upgrading approximately 100 DSLAMs -- pieces of ADSL hardware which sit in Telstra's telephone exchanges and provide ADSL services to customers -- to the ADSL2+ standard which allows speeds up to 24Mbps, in a process first reported by ZDNet Australia in June 2005.
The arrangement will see People Telecom use the hardware to launch ADSL2+ services from February this year. People Telecom chief executive Ryan O'Hare told ZDNet Australia around a third of NEC's DSLAMs had been upgraded.
"We expect the balance to be done shortly as part of the deal," he said. "It'll be done on demand: as soon as we start getting a pile of customers in the exchange, they'll just upgrade it."
Although the ISP has until now primarily resold Telstra's wholesale DSL offerings -- limited to 1.5Mbps under the ADSL1 standard -- O'Hare said recent decisions by Telstra's management had forced his company to look elsewhere.
"ADSL1 will be gone, we've got to move those customers somewhere. Because nobody's going to sit on 512kbps when they can get a 24Mbps connection.
"Telstra Wholesale does not provide ADSL2, and has no intention to do so. It's part of [Telstra CEO] Sol Trujillo's strategy of keeping it for his retail customers.
"So this way we had to source a new and better solution for ADSL2 and high-speed broadband services," he said.
According to O'Hare, the deal was "probably the better of all solutions, because we're not just buying somebody else's product".
"It immediately puts us in the same space as some of the larger ISPs who've been rolling out equipment for a while," he said, referring to the likes of Telstra, Optus, iiNet, Internode and Adam Internet which are currently spending hundreds of millions of dollars on ADSL hardware.
It sort of sits with our model of being a non-major network operator, but getting the benefits thereof, he added.
People Telecom customers in areas served by NEXTEP's hardware will have their connections migrated away from Telstra "in due course", O'Hare said, although they could request a quicker move if they wanted the higher speeds that ADSL2+ offered.
People Telecom intends to launch new types of Voice over Internet Protocol (VoIP) services targeted at businesses, according to a statement announcing the deal. The ISP already has several VoIP offerings.
O'Hare confirmed part of the new services would be a so-called virtual PABX or IP Centrex solution. "Basically plug and play Cisco or Huawei handsets into a self-managed online service," he said.
Financial terms of the deal were not disclosed.