AUCKLAND, New Zealand, March 29, 2000 - Cisco Systems, the worldwide leader in networking for the Internet, announced today it will supply Telecom New Zealand with a national Internet-based communications network, allowing Telecom NZ to offer a new range of Internet Protocol (IP) services to customers.

Cisco will build an Internet Protocol Virtual Private Network or IP VPN for Telecom New Zealand, using Multi Protocol Label Switching technology (MPLS). The new network will be based on the Cisco MGX 8850 and BPX 8600 series wide-area edge switches, offering the industry's widest breadth of integrated IP + ATM services and unmatched deployment flexibility.

According to Tim Hemingway, Cisco Country Manager for New Zealand, this single multiservice network will enable Telecom New Zealand to reduce capital and operational costs by eliminating the need to build multiple overlay networks. It will also enable Telecom NZ to offer an enhanced range of 'New World' IP services to small and large business customers.

By building an IP VPN using MPLS and Cisco's IP + ATM technology, Telecom New Zealand will be able to reduce its investment in costly, traditional circuit switches while accelerating the delivery of New World IP services to ensure long-term growth and revenue. In addition, the new network will offer greater scalability, manageability, and unmatched flexibility for its customers.

It also enhances Telecom NZ strategy with AAPT Australia, as it will enable the first fully integrated trans-Tasman network. AAPT is a major Australian telecommunications carrier in whom Telecom NZ acquired a controlling interest in 1999.

"We are delighted to be partnering with Telecom on this important project as they are a globally recognised telecommunications innovator", said Mr Hemingway. "We have provided a complete IP VPN solution to Telecom New Zealand, putting them in a unique position to offer leading-edge services that give them and their customers a true competitive advantage."

Barry Davey, Telecom NZ General Manager, IPN Data, said Internet Protocol has become the preferred service delivery mechanism for business because it enables enterprises to offer flexible and secure access to their network by customers and suppliers.

"Customers can develop private e-business and e-commerce applications at a much lower cost and their customers and suppliers can take advantage of this technology to automate their business transactions between multiple companies," Mr Davey.

"Our IP+ATM solutions enable service providers to deliver revenue today with transport services like frame relay and private lines. Providers can easily IP-enable this network using MPLS, allowing them to offer the same set of IP services that previously required a separate IP network. This efficiency and flexibility benefits not only Telecom New Zealand, but their customers as well," said Rob Redford, Director of Marketing for Cisco's Multiservice Switching Business Unit.