Telecom NZ signs $NZ1.5b outsourcing deal

Telecom New Zealand (Telecom NZ) has signed a $1.5 billion 10-year IT outsourcing deal with EDS New Zealand.

The service provider will assume responsibility for Telecom's entire IT operation including its data centres, operating platforms, print/mail functions, SAP enterprise system and Novell Groupwise system.

The deal also covers maintenance and application development for Telecom's administrative functions such as billing, customer sales and service and provisioning.

EDS will handle some infrastructure management, including Telecom's 7000 desktops.

The outsourcing deal incorporates an agreement with Microsoft to develop and deliver online services to customers.

Telecom will retain its IT strategic planning role, and Telecom NZ's 600 IT staff will be offered employment with EDSThe carrier has secured the option to purchase up to a 49 per cent stake in EDS New Zealand over the next four years, subject to due diligence procedures.

"This transaction is designed to support a long-term EDS-Telecom relationship," said Steve Smith managing director, EDS New Zealand.

"The Telecom-EDS-Microsoft information technology and telecommunications alliance will meet the full spectrum of US and telecommunications needs of customers in an increasingly competitive international marketplace," said Roderick Deane, chief executive, Telecom NZ.

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