AT&T announced yesterday that it signed an agreement with IBM to serve as the company's provider of outsourced telecommunications and network management services -- an assignment previously handled by IBM's own services division.

AT&T said it expects the agreement, which was announced in a AT&T also announced that it had agreed to expand the IT services that it buys from IBM. The company said it expects to incur roughly US$60 million in charges because of the expanded purchases of IBM IT services.

IBM spokesman Fred McNeese says that the company's outsourced telecommunications and network management services had previously been provided by IBM Global Services.

"It was a strategic decision," McNeese says. "We concluded that network management services would be best handled by a partner, and we have an outstanding working relationship with AT&T."