News Release

Telecom Italia Pioneers High Speed Telecommunications In Europe

Selects Cisco for State-of-the-Art ATM Communications
Oct 22, 1996

Selects Cisco for State-of-the-Art ATM Communications Infrastructure

SAN JOSE, Calif. - October 22, 1996 - Telecom Italia, the world's sixthlargest service provider, said it has selected Cisco Systems to supplywide area Asynchronous Transfer Mode (ATM) systems as the foundationfor a new national telecommunications network. The initiative marks amajor milestone in the delivery of high-speed voice, video and dataservice throughout Europe. Financial details of the agreement were notdisclosed.

In the first phase of a massive three-year telecommunications project,Telecom Italia has initially purchased and deployed 20 StrataComBPX/AXIS ATM switches over which it is now providing a variety ofMultimedia services throughout Italy. Future plans include offeringsimilar services in Europe through its subsidiary, TeleMediaInternational (TMI), which operates 70 points of presence outsideItaly.

"Many are surprised to understand that Italy represents the fifthlargest economy in the world with a data communications market valuedat over $1 billion," said Guiseppe Tilia, marketing director forTelecom Italia. "ATM is more than just a strategic direction for ourcompany, it's fundamental to driving costs down and the provision ofvalue-added services up."

Tilia continued, "ATM is really the new frontier for data transmissionapplications and in the near future for total integration of voice anddata. We believe we are pioneering a new age of telecommunications thatreflects an insatiable demand for high speed access and connectivity."

Internet Growth Key Factor In Driving Infrastructure

According to Telecom Italia, the new ATM infrastructure is designed toaddress increasing customer demands for Internet services along withsupport for high-speed, high-bandwidth applications such as disasterrecovery, LAN interconnection and voice/data integration. TelecomItalia also plans to use the new broadband ATM backbone to consolidateits X.25, IP, Frame Relay and Internet traffic.

Telecom Italia identified three key business goals of the ATMinitiative: 1) to reduce time to market, 2) save money and reduceoperational costs through the integration of multiple networks andnetwork services, and 3) meet existing and future demand for higherspeed access and transport.

The new infrastructure has enabled Telecom Italia to deliver high-speedaccess to the Internet, as well as voice, LAN interconnection andnative IP services to business customers. The company has alsolaunched the first national ATM service, called ATMosphere. The newservice allows customers to purchase different classes of ATM servicebased on specific requirements. ATM service is available, on a flatrate pricing scheme, at speeds ranging from 16 kbps to 34 Mbps (E3).

"Telecom Italia is clearly taking a leadership and pioneering role indelivering next generation communications services," said Jon Shantz,vice president of marketing for Cisco's service provider market group."Our recent purchase of StrataCom is already helping carriers to betterdeliver and differentiate their services on an end-to-end basis. Thisis global proof that we are delivering such solutions to themarketplace."

First Commercial European ABR and Low Speed ATM Service

Telecom Italia is also one of the first carriers to offer commercialavailable bit rate (ABR) as well as low-speed (T1/E1) ATM services. ABR is a new class of ATM service that guarantees customers agreed uponlevels of network capacity and allows customers to access extra unusednetwork capacity when available. Telecom Italia is also providingconstant and variable bit rate ATM services to customers.

"With ATM, our customers can save anywhere from 10 to 50 percent overexisting leased line costs using CBR or VBR services, and perhaps evenmore with ABR," said Tilia.

"The growth of the Internet and the ability to efficiently providemultiple services over a single network have been key factors drivingour infrastructure decisions," said Claudio Brosco, director of network architectures at Telecom Italia. "The advanced implementationof Cisco's ATM platform not only delivers high-sustained TCP throughputbut enables us to fully maximize our infrastructure investment anddifferentiate our service offerings."

Central to Telecom Italia's infrastructure concerns were the issues ofplatform scalability, traffic management and the ability tosimultaneously offer multiple classes of service. In 1997, TelecomItalia expects to begin integrating their various networks, namelyX.25, frame relay and IP over the ATM infrastructure, as well asprovide integrated access.

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