Sydney company extends $40m Telstra support deal

Digital services provider Broadcast Services Australia (BSA) has won a multi-million-dollar competitive tender to provide support and maintenance to Telstra in Sydney and Brisbane for another two years.

The contract, which covers new telephone connections, extensions and fault repairs between local exchanges and business or home customers, is expected to net between $43 million and $48 million in revenue from May 2004 to June 2006.

Ian McGregor, company secretary at ASX-listed BSA, said the Sydney-based firm had been the incumbent services provider for Telstra in 'a major portion' of Sydney and Brisbane but the job had late last year been put out to tender.

'We have been doing that work, but it went out to tender around Christmas and twelve companies tendered,' he said.

McGregor said BSA had won the deal partly because Telstra saw the services provider as a good partner. Telstra had apparently had no qualms about giving BSA one of the last areas of its business that had been done in-house, he said.

'We have an internal proprietary system [for example] which we know interfaces with [Telstra's] system to give them savings as well,' McGregor said.

One of BSA's main foci was in migrating analogue communications to digital, he added.

Mark Foley, joint MD at BSA, said BSA's proprietary installation, contractor, billing and management back office system allowed for streamlined call routing and contractor management.

The deal would better position BSA as a contracting company in the telecommunications sector, providing 'significant synergies' with its existing contractor services division.

McGregor said the Telstra deal was 'a volume-based business'.

'So we should be able to deliver higher margins. That's the theory. The ability of this contract is it gives us a fixed-volume base, which enables us to  ramp up to the next level of commitment of our business,' he said.

BSA has also just been accredited to train contractors to support Telstra services. Its new Telstra-registered Training Provider certification would allow it to train new contractors as well as up-skill existing contractors.

McGregor said the new certification was expected to help address increasing levels of demand for those skills as more end-users opted for digital telecommunications over analogue.

BSA, which has 140 staff based at offices around Australia and 400 to 600 contractors, has two divisions, Contracting Solutions and Transmission Solutions.

Contracting Solutions provides domestic and commercial satellite broadcast and high-volume telecommunications services. Transmission Solutions supplies turnkey equipment and infrastructure services to the broadcast industry.

Foxtel, for example, expected to double its 800,000 subscribers to 1.6 million in two years. Further, Foxtel had claimed it had 22 percent of the market here and would increase that to 35 percent in two years, McGregor said.

Foxtel was a major business partner of BSA, he said.
 
'We've been advertising [for more contractors] since pre-Christmas. And I wouldn't say we've sucked the market dry but I would say we've taken a swag of those out there,' McGregor said.