Telecom wins CHH telecommunications deal

By PETER GRIFFIN

Telecom has struck a $60 million deal to manage Carter Holt Harvey's telecommunications needs for the next five years, after delivering on a plan that strips nearly $3 million a year from CHH's communications costs.

Telecom already has much of CHH's business, but the deal extends Telecom's responsibility to cover everything from voice calling, data and mobile to internet access and remote working. Previously, Vodafone had around 30 per cent of CHH's mobile business.

The deal covers CHH's operations in Australia, where the company employs 3000 people, and is a boost for Telecom's transtasman business.

But Telecom was never assured of the contract.

"We didn't have a very good relationship with Telecom a year ago," said CHH's chief financial officer, Jonathon Mason.

Dissatisfied with their communications spend, CHH asked Telecom to put a team together to look at ways of reducing costs.

"We showed them our books for all our communications costs and how we were set up and they gave us a better understanding of what it costs to serve us," said Mason.

"What we needed from Telecom was for them to put very talented people on the project. They did that and we saved close to $3 million."

The cost-cutting team weeded out phones that were being used irregularly but still had accounts attached to them and switched from AOL to iPass as its provider for remote access to the CHH network for travelling employees.

The business never went out to tender, but Telstra, which also considers itself a strong transtasman player, was approached.

TelstraClear's chief executive, Rosemary Howard, said that as a challenger with a limited network reach, the telco had to be selective in the corporates it targeted.

"We still can't compete everywhere in New Zealand. Once we can, we'll be going for all opportunities."

She said Telecom was putting pressure on corporate pricing in a bid to keep business.

"Telecom is very much dropping their margins for large corporate customers and putting up their margins for regulated products like residential access," said Howard.