RealTime IT News

Telecom Shortlists Network Outsourcing

NEW ZEALAND -- Telecom has come up with a shortlist of three preferred vendors to take responsibility for managing its entire network infrastructure across Australia and New Zealand.

Simon Moutter, Telecom's group general manager of networks says the company has short-listed Alcatel, Lucent and NEC but it could be several months before the details are worked out and a successful candidate chosen.

Telecom has been looking for sometime at working closely with a smaller number of vendors based around a new business model, which could include structured financing.

Potentially the successful candidate might end up managing and integrating equipment from other suppliers.

The new network strategy could be worth more than $6 billion for upgrading, building and running the network over five years.

In a similar restructuring in the It area, Telecom earlier this year outsourced its entire IT operations to EDS.

It's believed the move to outsource its network to a single player could be a world leader in improving speed to market, leveraging the power of global vendors and their product development processes.

"It's a potentially different way to own the network and could involve some structure financing, meaning the successful vendor may make its own investments," says Mr. Moutter.

Alcatel, Cisco Systems, Ericsson, Lucent Technologies, Marconi, NEC, Nortel Networks and Siemens had all been bidding for the Telecom business.

Meanwhile rumours abound that Telecom New Zealand is about to take an equity stake in Hutchison, following its unsuccessful attempt to grab Optus mobile business across the Tasman recently.

Telecom did a deal with Vodafone and Hutchison in the hope that it could acquire an increased customer base last month through a backdoor deal. That fell through when Singtel grabbed the entire assets being sold off by Optus.

If the new deal went through Telecom would gain access to a slice of Hutchison's 3G spectrum acquired at auction from the Australian government.

Telecom-owned AAPT has spectrum in the 800 Mhz band where Hutchison already operates its Orange network. A cash injection from would assist Hutchison recover from its $A193 million worth spectrum acquisition.

Meanwhile Telecom has put the rollout of AAPT's CDMA network through Brisbane, Adelaide and Perth on hold. The deal stalled largely through uncertainty about what would happen to the Optus network was in the hands of Lucent Technologies.

Both Telecom and Hutchison are up against the larger and more established Telstra, Optus and Vodafone mobile networks.

Telecom was unable to confirm whether a deal to acquire a slice of Hutchison was in fact in progress.