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Telecom Gives Up Big CBA Contract

Fuseworks Media
Fuseworks Media

Wellington, July 17 NZPA - Telecom's business Gen-i is not tendering for another contract with Australian bank CBA after eight years' work, to concentrate on smaller clients with a trans-Tasman focus.

Telecom signed a five-year, $A500 million ($NZ638 million) contract in 2000 to provide Commonwealth Bank of Australia with the majority of its telecommunications services, and its current contract expires next February.

Gen-i, Telecom's information and communications technology (ICT) business, decided not to compete for a new contract to provide CBA's telecommunications services.

"Our strategy for growth in Australia means an investment in our people and capabilities, with a focus on building our core competencies," said Gen-i Australasia's recently appointed chief executive Chris Quin.

"The nature of CBA's network means it is difficult to leverage this capability for other clients in the mid-market, where we focus on building our scale and capabilities for repeatable solutions."

The decision did not change financial guidance previously provided to the market.

Gen-i has 3300 corporate, government and business customers.

Telecom has previously forecast net profit of $700m-730m for the year ended June, with earnings before interest, tax, depreciation and amortisation to decline 4-6 percent in 2009.

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