Joint venture to aid Telstra network services push in Asia

Telstra has signed an MoU with Telkom Indonesia to establish a joint venture

Telstra this afternoon announced it had signed a memorandum of understanding with Telkom Indonesia to establish a joint venture to deliver cloud, unified communications, managed network and security services in Indonesia.

The joint venture mooted in the non-binding MoU would be the sole vehicle for the provision of network applications and services in the South-East Asian nation for the two companies.

"Indonesia is a fast-growing NAS market and we believe the best way to make in-roads is by partnering with a well-recognised and respected local player," Brendon Riley, Telstra’s group executive, global enterprise and services, said in a statement.

"It also aligns to our strategy of supporting our enterprise customers around the globe," the Telstra exec added.

Last year Telstra chief David Thodey reshuffled the telco's senior leadership and announced an increased focus on expansion in Asia.

Riley said that the joint venture was a component of the telco's expansion plans for the region, and that it expected to use "both Telstra entities and local market partnerships" to facilitate its push in Asia.

"We have also commenced expansion of selected NAS portfolios — managed network services and cloud — into international markets, particularly in the Asia-Pacific region so today’s announcement is a further indication of our intentions for the region and for our NAS business," Riley said.

"Potentially, on the surface, it's a good deal," telecommunications analyst Paul Budde said.

"As an advanced economy, business applications are further advanced [in Australia] than in developing countries, so the know-how and expertise from Telstra should be well ahead of that of Telkom," the BuddeComm analyst added.

"Since David Thodey has taken over [as Telstra CEO] there is greater focus on the services/application side, rather than the infrastructure, so leaving the latter to Telekom makes total sense. Based on new developments Telstra is involved in — cloud, tele-health — there are also great future opportunities here."

However Budde added that Telstra "doesn’t have a flash reputation in Asia".

"There have been literally dozens of start and stop activities since the company launched its Asia strategy in 1995," he said. "Its aim then was to get 25 per cent of its telecoms revenues from Asia by the year 2000; 14 years later they are still a long way from that target."

Telstra earlier this week acquired network integrator O2 Networks, which will join the telco's NAS group. In August the telco also added unified communications and contact centre integrator North Shore Connections (NSC) to its NAS division.

Also this week the telco announced that it had upgraded international submarine cables to meet demand for network services in Asia and the Pacific. The cables include Endeavour, connecting Sydney and Hawaii; Reach North Asia Loop, which links Hong Kong, Japan, South Korea and Taiwan; and Asia America Gateway, which links South East-Asia to the US.

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