Telecom contracts worth $850 million

By PETER GRIFFIN


Engineering companies Downer EDI and Alstom will next year begin five year contracts with Telecom collectively worth around $850 million as the companies take on the work of snubbed field contractors GDC Communications and Cabletalk.

The GDC and Cabletalk staff shed next year after losing lucrative "patch" contracts with Telecom may have a job with Alstom or Downer waiting for them.

French company Alstom, which employees 435 people in its telecoms division, would need to increase staff to 700 people to meet the extra workload. Australian listed company Downer is looking to add an extra 150 to 200 people.

GDC and Cabletalk, both listed companies, face radical restructuring as they adapt to life without tens of millions in guaranteed revenue from Telecom field service contracts.

Those contracts covered network maintenance and provisioning through to cable location and the deployment of new equipment.

The fallout is less severe for Cabletalk, which recently picked up a large contract to supply field services to TelstraClear through subsidiary Astute Networks. That move effectively cut it out of Telecom's future plans.

Size and reach seem to have given Alstom and Downer the bargaining power to win the 10 patches, which are split evenly between them.

The contracts come into effect gradually from February.