Alcatel lifts Trans Tasman telco stake

Telecom New Zealand subsidiary AAPT and global telco Alcatel have signed a five-year network management agreement worth $53 million, as the Australian part of a $157 million trans-Tasman deal.

About 100 staff from AAPT will move to Alcatel Australia, and 200 from Telecom NZ to Alcatel NZ on 1 July as part of the $157 million deal.

It will see network management added to an overall outsourcing package including design, support and servicing for all Telecom Group networks here and across the Tasman.

AAPT's network serves about 750,000 customers in Australia, while Telecom NZ serves some 1.3 million.

'The over-riding agreement is for their entire network and now we're responsible for network management and technology decisions [as well]. It's very different from anything that's happened before,' said Ross Fowler, CEO at Alcatel Australia. 'It will give the market leaders a bit of a shake-up.'

The new agreement expands a wider 'strategic partnering' contract, announced last year between NZ's Telecom Group and Alcatel to jointly manage the development and integration of the Telecom Group's trans-Tasman 'Next Generation' fixed-line IP network. Alcatel was approved as prime vendor for the new network late last year.

Rhoda Holmes, general manager of customer and network services at AAPT, said the overall deal was believed to be a first for the telecommunications industry in terms of size and scope, and would prime AAPT for further growth.

'As we grow our business and customer base, we are looking to move our fixed costs to variable ones, giving us the opportunity to focus on growth. If AAPT was to manage the network, there is no way we could afford to do that,' Holmes said. 'Nobody else has a model like this. Alcatel will manage our technology while we focus on how to excite and stun our customers with our different solutions.'

Alcatel Australia's Fowler said the deal would allow AAPT and Telecom NZ to focus on the front-end of management and customer service. Exact details of the outsourcing deal--beyond the transfer of staff--would be nutted out over the six months following 1 July.

Another 20 AAPT staff had already been transferred to Alcatel when the network design section of the deal was signed mid-2002. 'We believe we can get a lot more cross-Tasman synergy in the network operations,' Fowler said.

AAPT's Holmes said the 12-month-old strategic partnership had already seen 'significant' benefits to the Telecom Group. A national DSL network platform had been installed in New Zealand in 220 days, a job that she said would normally take some 350 days.

'We are getting a new capability for our big corporate and enterprise customers,' Holmes said. '[The agreement] is already taking significant costs out of our network just be re-organising network capacity.'

'Tangible benefits' were already occurring as a direct result of staff beginning to work and think differently about the network, she said. 'This is the end of a 2.5-year road . . . which has seen us partner Alcatel and Telecom NZ's group of companies, so there are lots and lots of technical changes we can be making now,' according to Holmes.