The agreement will see Orbit use its VoIP networking software and equipment to help in the building of the nationwide network. The agreement between the two companies calls for Orbit to be awarded a 10 per cent stake in ITSP Australia and earn fee income. All hardware and installation costs will be borne by ITSP, Orbit said in a statement.
The service will enable Australian businesses and customers to save money on long-distance calls, the company said. On its Canadian service, Orbit's customers can subscribe for unlimited long-distance calls and Internet dial-up for C$19.95 (around $23) per month.
According to the Australian Bureau of Statistics (ABS), about 60 percent of Australia's 19 million people live in the six cities to be covered -- Adelaide, Brisbane, Canberra, Melbourne, Perth and Sydney.
Several countries in the Asia-Pacific region are looking at basing their future fixed-line telephone networks on VoIP, given its inherently greater efficiency and potential to cut telecommunications costs.
With a call on the traditional PSTN (public switched telephone network), at least 64Kbps of bandwidth are needed to transmit the call. VoIP allows for more efficient transmission, requiring about 10Kbps of bandwidth for a call. By using the Internet backbone, calls also bypass the international telephone settlement system, and can thus be offered at significantly lower cost than traditional voice telephony.