Australian incumbent carrier Telstra Corp. today unveiled an $8 billion "Network Transformation Project" to migrate to a single all-IP network, naming Alcatel (NYSE: ALA; Paris: CGEP:PA), Ericsson AB (Nasdaq: ERICY), and Cisco Systems Inc. (Nasdaq: CSCO) as its main vendor collaborators. (See Telstra Names NGN Vendors.)

Alcatel, already a key technology provider to Telstra, lands the lion's share of the fixed network spoils, with a five-year agreement worth an estimated $2.55 billion. It will provide: a range of access equipment, including IP DSLAMs, fiber-to-the-node (FTTN), and fiber-to-the-premises (FTTP) equipment to hook up Australia's 5 million-plus households with high speed connections; VOIP systems, including softswitch and media gateway technology; Ethernet aggregation equipment; and a range of integration, support, and maintenance services.

Alcatel has been working with Telstra on FTTH trials for more than a year. (See Telstra Uses Alcatel for FTTP.)

Cisco has been named as the core IP network equipment supplier, for which it will supply a number of CRS-1 routers. No value was given for Cisco's deal.

Ericsson, another long time Telstra supplier, is supplying the latest mobile network infrastructure, including WCDMA 3G base stations, including HSDPA (high speed downlink packet access) capabilities, core network technology, and a range of support and integration services. No value was given for its deal.

Telstra says it's in discussions with "several other vendors," who will be named soon. These other vendors are believed to include OSS vendors: Telstra plans to consolidate its back office systems in a $728 million overhaul over the next three to five years.

Alcatel spokeswoman Hilary Mine says Alcatel has "a head start" in its Telstra engagement thanks to its experience at U.S. carrier SBC Communications Inc. (NYSE: SBC), where it is the lead integrator for the RBOC's access network transformation. (See Mais Alors! Alcatel Bags $1.7B SBC Deal .)

She adds that the systems supplied are "IMS-ready", and that there was no demand from Telstra for any specific video capabilities.

Mine adds that the Telstra deal has a more significant services component than the SBC deal, and notes that Telstra is undergoing more of a total network transformation.

Alcatel expects to start recognizing revenues from the deal in the first half of 2006.Telstra is the latest national operator to announce its commitment to an all IP future, following the likes of BT Group plc (NYSE: BT; London: BTA), KPN Telecom NV (NYSE: KPN) in the Netherlands, and Norway's Telenor ASA (Nasdaq: TELN). (See BT Unveils 21CN Suppliers, KPN Lays Out IP Migration Plan, and Telenor to Unveil All IP Plan .)

— Ray Le Maistre, International News Editor, and Nicole Willing, Reporter, Light Reading