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New Telecom Service To Manage Internet Traffic

PRESS RELEASE
TELECOM

10 June 1999

NEW TELECOM SERVICE TO MANAGE INTERNET TRAFFIC

Telecom is setting up a new free service for residential Internet users and Internet Service Providers (ISPs) which will enable Telecom to more efficiently manage the growing Internet traffic through its network.

General Manager Rob Fyfe said Telecom was becoming increasingly concerned at the potential impact of the huge volumes of Internet traffic on the integrity of the voice network. "Managing Internet demand effectively is our number one priority," he said.

"We simply cannot risk a situation developing where, for example, customers cannot access the 111 Service in time of need because Internet users are tying-up the voice network."

However, Telecom also recognised the needs of its Internet customers and the ISPs which support them and was dedicated to providing them with the capacity they needed. "We think the new service will be a win-win for everyone," he said.

The new service will enable customers to access the Internet by dialing an 0867 number to reach their ISP. The 0867 numbers will allow Internet calls to be carried via Telecom's Intelligent Network and will allow customers to access their chosen ISP within a local calling area.

If ISPs decided to adopt the service, Mr Fyfe said the only impact on customers would be a once-off requirement to change the access number programmed into their PC.

Customers will still be able to dial their ISP using their existing local telephone number, however after the first 10 hours of usage per month, residential customers will incur a two cents per minute calling charge (including GST).

"The purpose of the charge is to incent heavy-user customers to dial in via 0867," Mr Fyfe said, "helping to ensure that Telecom is able to manage the capacity demands of all its customers."

The new 0867 service would give ISPs using the Telecom network another choice in the way they provided service to their customers. "Now they will be able to use 0867 or Telecom's existing IPNet service. Both these services will be free to ISPs' residential customers," he said.

Telecom was now offering its new 0867 service to ISPs, Mr Fyfe said, and had tried to make the service as valuable as possible for them. "There are several advantages. ISPs will be able to use the same 0867 number in each local calling area where they offer service, rather than a different number in each area, and they can also make use of call stepping, which will help them manage their own Internet traffic. Importantly, ISPs can still use the same 0867 number if they choose a carrier other than Telecom. "

Introduction of the 0867 service is planned for June/July, with the 10 hour-plus charge in effect from August. "Telecom will be pro-actively explaining the new service to customers, and will work closely with ISPs which choose 0867, to tell their customers how the service works," Mr. Fyfe said.

"0867 will enable us to identify voice and data calls," Mr. Fyfe said, "and route data traffic to manage flows between exchanges. It will also allow us to prioritise calls in times of emergency. As I said, we think this is a win-win solution to what has been a perplexing problem for us," he said.

KEY FACTS ABOUT INTERNET USE

The average length of an Internet call is 22 minutes, compared to 3 minutes for an average voice call.

In March 1999, 23.2% of residential local phone traffic was Internet traffic, up from 16.7% in April 1998.

By 2002 it is anticipated 35-40% of residential local phone traffic will be Internet traffic.

The top 1% average more than 400 hours of use a month.

This top 1% accounts for close to 20% of residential Internet minutes.

In March 1999 there were 274 million minutes of residential Internet traffic, up 63% on the 168 million minutes measured in April last year. Over the same period the voice traffic in the network grew by 9.5%.

Currently there are 3.3 billion residential Internet minutes a year, compared with 10.9 billion residential voice minutes.

ENDS

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