AT&T has begun launching its enhanced virtual private network (VPN) service across the Asia-Pacific region, backed by a US$200 million war chest for regional systems expansion this year. The high-speed data service, which targets multinational firms and other large enterprises, joins several earlier VPN services also based on multi-protocol label switching (MPLS) technology. Initial markets for the service include Hong Kong, Singapore, Japan and Australia. The rest of the region is expected to have the service within this year. AT&T officials said the company was not at a disadvantage for taking a measured pace in offering an MPLS-based VPN service in Asia. Kevin Ng, AT&T Business general manager for Hong Kong and South China, said: 'We think that we have launched this service at the right time. We have used much improved networking products to support it and we expect to generate more business in the region this year as the economy picks up.' A rush to accelerate data network traffic for enterprises has led a number of international communications carriers and Internet-focused carriers Global Crossing and Level 3 to offer MPLS-based VPN services. Domestic carriers, including Pacific Century Cyberworks subsidiary Beyond the Network and China Telecom are also providing such services. David Foster, director of global strategy at AT&T Business, said AT&T had also launched MPLS on its core network backbone in the United States. 'We will spend US$200 million this year to make our infrastructure in Asia and Europe fully support MPLS,' Mr Foster said. Cisco Systems and Juniper Networks were among suppliers of MPLS gear to AT&T, he said. VPN services have allowed many companies to cost-effectively operate their extranets and wide-area intranets by using the shared public Internet, instead of the more expensive alternative of owning or leasing a private line. As packaged for VPN applications, MPLS works alongside existing routing technologies, such as frame relay and asynchronous transfer mode, to provide high- speed data-forwarding between corporate networks, and allow reservation of bandwidth for network applicants with different requirements of service quality. 'This offers an efficient, scalable way for businesses to incorporate mission-critical applications, while reducing capital outlay for network equipment, systems and personnel,' Mr Foster said. AT&T's enhanced VPN makes the company a one-stop-shop for companies seeking to build and fully manage an integrated VPN, which straddles enterprise networks and Internet VPNs. This service portfolio covers implementation to operation, including connectivity, customer premises equipment, availability, and security monitoring and service level agreements. Mr Foster said the 'key differentiator' for this service was AT&T's continuing US$300 million global investment programme to make managed services more widely available. MPLS enables a company to carry different mixtures of data and voice traffic with guaranteed levels of performance. Enterprises can define the bandwidth and traffic engineering requirements by identified applications. Mr Ng said: 'AT&T is responding to the needs of businesses that want to reduce the complexity, challenges and risks of managing their own enterprise networks.' By the end of this year, AT&T expects to prepare 850 cities across 60 countries for MPLS. This network includes the global data network AT&T acquired from IBM in 1998 and the assets being returned to AT&T through the dissolution of its Concert venture with British telecom. However, AT&T officials said operating its own network in the mainland remained subject to regulatory restrictions. Mr Ng said the mainland was not included in Asian markets where AT&T would offer MPLS-based VPN services this year. That puts Bell Canada-owned Teleglobe at some advantage because of its alliance with China Telecom. Teleglobe is the first global carrier to establish an IP-based VPN interconnection with the mainland. By connecting China Telecom's and Teleglobe's MPLS-based IP networks, both service providers offer an array of IP-based VPN services to their enterprise customers on a global scale.