CBA support workers could move to Telstra: Gen-i

The Telecom New Zealand-owned managed services firm's local chief, Phil Varney, would not disclose how many staff were affected, telling iTnews that numbers were subject to "ongoing discussions with Telstra and the CBA".

"We're working with [both] to see which resources that support CBA are needed by Telstra," Varney said.

"The other thing is we've now got all these highly skilled resources we're keen to keep in the business.

"We're redeploying a lot of [staff] resources on re-developing the upper mid-market with particular emphasis on trans-Tasman [services]."

Gen-i has said the handover period to Telstra will take up to two years but Varney was of the opinion it could be done in a year to 18 months.

"We're working closely with Telstra on what the transition timeframe should be," he said.

Since CBA awarded the $1 billion core telecommunications services contract to Telstra yesterday, Gen-i has been vocal in pointing out its role at CBA.

Its projects include the Sydney metro area network extension and high-value contact-centre services.

Gen-i did not to contest the core telecommunications services contract at the bank last July.

Varney confirmed the decision was in part due to low margins on the contract but was also careful to point out that price wasn't the bank's only consideration.

"We didn't see it fit to go through the tender process to give them the prices they already enjoyed," Varney said.

"We knew in this marketplace we could not compete with a carrier like Telstra in the position that they're in."

He said the low margins would not squeeze other managed-services providers from bidding for similar "exceptional deals" in the future.

"When we look at exceptional deals of 10s of millions of dollars per year - of which there aren't many - it's not inconceivable for a service provider to compete with a carrier in that environment," he said.

There was air of inevitability in the outcome, he said.

"We took a conscious decision that after eight years it was time [CBA] should go to one of the major players for core telecommunications services," Varney said.

"We didn't make the choice - the bank needed to decide whether or not to continue.

"But it's fair to say that many of the services we provided to CBA were Telstra services - we were just managing them on behalf of the bank. Now Telstra is managing those services directly.

"We recognised the bank wanted to get a more direct relationship with the carrier."

Telecoms analyst Ovum said it believed "the [CBA] deal is not just a win against the incumbent Gen-i [but that] it will give Telstra the opportunity to take on management of the CBA's telecoms network upgrade."

"At 10 years, this is one of the longest terms for a telco-led managed services contract we have seen - most run five to seven years with extensions - and is a great opportunity to show the advanced services capability of Telstra's NextIP and NextG next-generation IP and wireless network investments," said senior analyst Claudio Castelli.

Castelli said telcos "will look to offset the threat of price-focused negotiation" in managed services by offering better commercial terms around service management "and potentially by offering attractive financing options to their larger accounts".