Telecom downplays reports of outsourcing

Wednesday 3rd February 2010

Telecom Corp., the country’s largest phone company, downplayed media reports that it’s looking to ship IT services offshore, calling them “factually incorrect.” The shares slipped 0.8% to $2.33 in trading today.

The telecommunications company asked seven “leading global technology companies” to improve its internal information technology services and asked for proposals without boundaries or directives. Spokesman Ian Bonnar said the “project team is short-listing a few providers and will source further proposals from them over the coming months,” but is a long way from making any final decision.

“The documents discussed in the media relate to a review of how Telecom can improve its internal IT services, a large part of which is already outsourced,” Bonnar told BusinessWire.

“The vendors were encouraged to consider new and innovative ways of delivering shared technology services for the internal Telecom needs.”

Telecom was looking at outsourcing as many as 1,500 jobs, mostly concentrated in its in-house IT business Gen-i, according to the Dominion Post newspaper. Bonnar said the rumours were “factually incorrect” and don’t come from Telecom documents, nor did any of the submissions received discuss the involvement of Gen-i staff, he said.

\The telecommunications company has been struggling for good news over the past week after the second major outage on its much-vaunted XT network in as many months hindered services to its mobile customers for three days and prompted chief executive Paul Reynolds to make a public apology.

He followed up his apology with a compensation package worth some $5 million. This came at the same time as Telecom submitted its pitch to be involved in the government’s $1.5 billion plan to roll-out a fibre network for high-speed internet.

Businesswire.co.nz

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