O2 Networks joins growing Telstra NAS business

Telco to keep all O2 Networks staff as it seeks to fill consulting and integration gap

Telstra has acquired network integrator O2 Networks as it continues to expand its Network Applications and Services (NAS) business.

The Melbourne provider of network and security consulting and integration services has more than 100 staff serving 270 customers, including large financial institutions and government-owned enterprises.

Telstra and O2 Networks did not disclose the price of the transaction. The deal is complete and integration is expected to take six months, according to Telstra NAS executive director, Michelle Bendschneider.

Telstra said it will maintain the O2 Networks brand for now and will employ all of its existing staff. O2 Networks staff, including three of the four founders, will move into Telstra’s offices. Telstra seeks to keep O2 Networks as one non-fragmented unit within Telstra’s NAS group, Bendschneider said.

The NAS business division is a growing area at Telstra where the telco has recently been adding jobs. NAS is part of Telstra’s $5 billion revenue Global Enterprise and Services division, which is headed by Brendon Riley.

In the year ended 30 June 2013, the NAS portfolio increased revenue by 17.7 per cent thanks to a $1.1 billion six year contract with the Department of Defence as well as international agreements with Jetstar and Fitness First.

“O2 and the manage network space was a great opportunity for us to quickly plug what we had identified as a capability gap from day one,” Bendschneider told Computerworld Australia.

“We didn’t have the upfront consult, advise, help the customer in a technology-agnostic sense, choose the right solution and then design and help them integrate that.”

“It’s a really big shot in the arm for us to get this capability on board.”

O2 Networks has worked closely with Telstra for the past 10 years, noted O2 Networks Managing Director Euan Prentice. “None of this is new to us.”

However, becoming part of Telstra gives the network and security company more resources so that it can take on more clients and larger projects, Prentice said.

The O2 Networks deal follows Telstra’s acquisition in August of unified communications and contact centre integrator North Shore Connections (NSC) Group. NSC Group is also now part of the Telstra NAS division.

“O2 brings in the consulting, design, integration capability in the managed networks and security space,” Bendschneider said. “NFC did exactly that in the unified comms space.”

In the past, NSC and O2 Networks have referred work to each other’s firms, added Prentice. “We’ve never competed in the market.”

Bendschneider did not count out the possibility that Telstra might make more acquisitions like these in the future.

“We’ll continue to focus both our domestic and our global business and that will continue to be both organic and inorganic,” she said.

Earlier today, Telstra announced movement toward its strategy of expanding into Southeast Asia with upgrades to multiple submarine cable lines serving the region.

Follow Adam Bender on Twitter: @WatchAdam

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Tags O2 NetworksNetworkingintegratoracquisitionNetwork applications and services (NAS)NSC GroupTelstra

More about Department of DefenceNASNFCNorth Shore ConnectionsNSCNSC GroupO2Telstra Corporation Ltd

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