Line network deal an issue of sharing says Telecom

By RICHARD WOOD

Telecom New Zealand characterises its outsourcing deal with Alcatel as a "unique partnership" for the supply of its new internet protocol-based fixed line network.

"The approach is one of saying 'Let's not work as independent businesses and try and buy and sell things from each other'," said Telecom general manager of marketing Kevin Kenrick. "It's saying 'Let's work together to create value that we can both share in'."

Existing fixed line voice and data provision will ultimately be migrated to the new network. The telco hopes to bring products and service to market faster by dropping in what Alcatel has done overseas and avoiding having to deal with multiple suppliers.

Performance of the partnership is to be measured according to a "balanced scorecard" system and shared key performance indicators.

General manager network investment Rhoda Holmes said a precise figure could not be put on the deal because it depended on the value the two companies created and the money they saved by working together.

There would be some staff reduction within Telecom, said Holmes, but it would be "organic" to start with. Alcatel NZ managing director Mark Giles said the two companies were working out how to align their teams.

Holmes said a similar shared performance arrangement was also being worked through with services and outsourcing business EDS, which has a 10-year outsourcing arrangement with Telecom to supply IT services.