Brokers face Web trading dilemma

Citibank Australia is expected to share in $US250 million worth of global savings derived from a new $US750 million, five-year network outsourcing deal with AT&T, Don Koch, the local arm's head of technology, said.

However, Koch said, the savings component is likely to be the only prominent impact of the deal locally, as the wide-area network (WAN) servicing the Asian region is hubbed in Singapore.

According to company officials in the US, it will be the largest single-vendor network outsourcing agreement in the financial industry.

The bank's 11 networks operating in 98 countries will be migrated to one global data network (GDN) platform managed from AT&T Solutions Global Client Support Centre in Durham, North Carolina. AT&T centres in London and Singapore will assist in around-the-clock monitoring of the global network, expected to extend to all 98 countries by the middle of next year.

Router-based backbone equipment for the new network will come from Cisco Systems, said Rick Roscitt, president and CEO of AT&T Solutions during a teleconference.

AT&T and Cisco have been involved in "behind the scenes" talks and expect to forge a "much closer alliance" in the future, Roscitt said, declining to provide more specifics.

The Citibank contract will lead to a virtual private network (VPN) capable of adjusting to meet bandwidth demands from customers and employees. The VPN, which also will be used for electronic commerce, is expected to handle only data transmissions because voice transmissions, if added to the network, would monopolise bandwidth.

The contract will affect 400 full-time Citibank employees, 270 of whom are directly employed by the bank. All 400 will be able to apply for jobs with AT&T Solutions, so it is not known how many will lose their jobs, said Stan Welland, head of Citibank's global technology infrastructure division.

AT&T expects to add "thousands" of network-related jobs in the next several years, Roscitt said. Analysts predict that networking will grow 30 per cent annually, and Roscitt said that AT&T intends to reach that mark or more.

The company expects network outsourcing will grow from $650 million in revenues last year to as much as $1 billion this year, driven by contracts like the one signed with Citibank, he said.

"We fully expect to be sharing news of more of these kinds of agreements in the very near future," Roscitt said.

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