NTL awards IBM US$2B outsourcing contract

U.K. telecommunication operator NTL Inc. Thursday signed an outsourcing agreement with IBM valued at over US$2 billion.

The agreement calls for IBM's Global Services division to provide NTL with IT services for all its operations across the U.K. and Ireland until 2012, NTL said in a statement.

During the past 18 months NTL has acquired 11 companies. Integrating these has been a challenge and customers have not always received service up to the standard NTL would like to see, industry sources said.

IBM is facing the task of merging all IT services and bringing customer service to an acceptable level. This includes call center management and billing services, for example.

"Ultimately the customer will definitely benefit, the focus is on improving customer service issues, such as our service management systems," said NTL spokesman Malcolm Padley, declining to further elaborate on IBM's assignment.

IBM said that although its work will affect NTL customers, most of what it will do will be invisible to the user.

"A lot (of what we do) will be to some extent invisible. Over time it will lead to enhanced customer service an potentially new services to be offered by NTL," said a spokeswoman for IBM Global Services in London.

The deal is expected to generate about $450 million in savings for NTL over the life of the agreement, according to the statement.

As a result of the deal, nearly 500 NTL employees will be transferred to IBM. Thursday's agreement follows the signing of a memorandum of understanding announced on Jan. 11.

NTL, along with its affiliates, offers telecommunication services to consumer and business users mainly in the U.K. and Ireland, but also in Switzerland, France, Germany and Sweden.

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