Telco CDNs are becoming increasingly common as network operators such as Verizon, BT and AT&T are moving into distributing online video. In this light Telstra's announcement comes as no surprise as the company readies the launch of an over-the-top (OTT) video service serving content to the TV set, via its own set top box, the T-Box, and directly to LG TV sets.

There is no indication that Telstra intends to compete in the CDN services market - rather, the company is aiming to reduce backhaul costs and optimize the network congestion that can potentially result from strong uptake of an OTT video service unrestrained by metered data plans. A similar step has been taken by UK pay TV operator Sky which has developed an in-house CDN solution to support its VoD service.