Telecom's Gen-I unit to end 8-year partnership with CBA

Thursday 17th July 2008

Telecom's Gen-i unit will end an eight-year alliance to provide telecommunication services to Commonwealth Bank of Australia.

The decision won't change Telecom's financial forecasts, according to a statement from Gen-i today. The current agreement runs out in February 2009.

Commonwealth Bank's annual voice and data spend is about A$192 million and Gen-i had the largest share of that, possibly around A$130 million. The Telecom unit will retain a separate contract with the bank through until 2012 and will oversee the hand-over to the successful bidder in CBA's tender for the main contract.

The nature of Commonwealth's network meant it was difficult for Gen-i to leverage its capabilities with other clients, it said in a statement. The bank had invited Gen-i to submit a bid in the latest tender.

"Gen-i is re-shaping for profitable growth, with a focus on managed ICT services for the mid-market, particularly for clients with a trans-Tasman focus," it said.

In May, Gen-i announced it had won a four-year contract with ANZ National Bank to upgrade its core telecommunications infrastructure.

Shares of Telecom rose 1.2% to NZ$3.42.

In May, Telecom forecast a decline in earnings before interest, tax, depreciation and amortization in the 2009 year. It forecast a decline in group EBITDA of between 4% to 6% for the year ending June 30, 2009.

By Jonathan Underhill

Comments from our readers

No comments yet