C&W strikes 10-year deal with IBM

Telecoms Big Blue predicts rise in outsourcing as it takes control of key departments and customer care at vendor.

IBM has forged a #1.8 billion outsourcing deal with Cable & Wireless,departments and customer care at vendor. which it believes is part of a wider trend towards contracting in the telecoms sector.

The 10-year deal will give Big Blue control over all management and application development for C&W's mainframe, mid-range and desktop platforms, including customer care and billing.

C&W, based in the UK, will retain responsibility for overall IT strategy, security and its millennium compliance programme. It will also keep a small management team inhouse.

In conjunction with IBM, C&W will implement a customer care and billing system to enable it to give users a single bill for telephone, data and cable television services.

The deal follows a series of talks between the two companies which has led to the transfer of about 1,000 personnel to IBM (PC Dealer, 26 August).

IBM said it will create another 400 jobs, mainly in application development, although some roles will be filled by existing IBM staff.

Brian Sellwood, general manager of IBM Global Services for the North region, said: 'As we see deregulation of the telecoms industries across Europe, there is clearly an opportunity here.'

Sellwood added that telecoms was an important strategic market for IBM and he expected other telecoms companies would look closely at the C&W agreement.

Big Blue said it believed the deal to be the largest of its kind outside the US, which reinforced its view of the strategic importance of outsourcing to its own business, as well as reaffirming its position as a leading player in Europe.