Defence's Telstra-built network overhaul jumps another $33m

The Department of Defence has handed Telstra another $33 million for the long-delayed replacement of its fixed telecommunication network, as the massive overhaul nears its 10th anniversary.

The telco was recently awarded two seperate contract amendments worth $22.4 million and $10.8 million for the so-called ‘terrestrial communications project’ – or JP2047 – that first began in 2013.

The amendments bring the total value of the long-running deal to $1.63 billion and represent the first major increase since the contract was extended at a cost of $314 million in January 2020.

Telstra was first assigned to build the terrestrial communications network (DTCN) for $1.1 billion in October 2012 to link all of Defence sites and overseas troop deployments to the same network, and integrate its satellite and tactical networks.

A Defence spokesperson told iTnews that the $33 million increase relates to “services required to refresh out-of-life hardware”, as well as a pricing increase to reflect cost price index adjustments.

The amendments come as Telstra continues to work to deliver the delayed unified communication capability required for the high-speed, IP-based network to reach final operating capability (FOC).

FOC – or full operations – was first expected to be reached in mid-2016, but was pushed back due to delays with the first critical milestones, including initial operating capability (IOC).

When Defence did finally reach IOC two years late in April 2018, it set a revised FOC milestone for late 2019, pending the delivery of the network's ‘unified communications capability’.

But that revised deadline was also missed, and Telstra and Defence have spent almost two years continuing to work on the capabiltiy without providing an updated timeframe for when it might be delivered.

Defence would not say when FOC would be reached or whether the contract – which expires in October – will be extended or replaced when asked by iTnews, only that it would continue to need terrestrial communications services.

“The current Terrestrial Communications Contract expires on October 15 2021. Defence continues to require terrestrial communications services, and work is continuing to ensure the delivery of unified communications capability,” the spokesperson said.

While the main contract supporting the nework will expire in October, other, smaller terrestrial communications services contracts with Telstra signed over the last year extend out to July 2023.

All 353 permanent Defence sites had been “transformed” to the DCTN by August 2020, though it is not clear how many of these have received formal service acceptance.

Last year, iTnews revealed that Defence had assessed the project as having a “medium-low” delivery confidence – the second worst rating available – due to a number of “significant issues”.

In response, Defence had planned a number of corrective actions to resolve the network issues ahead of the project’s revised completion date, which at that point was September 2020.

iTnews' analysis of publicly available contract notices show that Defence has entered a total of 501 contracts with Telstra related to ‘terrestrial communications” since May 2013.

The combined value of the contracts is $1.86 billion.