Capita bags O2 mega-deal worth an estimated £1.2bn

Outsourcing giant to start work on 10-year contract in July

Capita has swiped another bumper contract win, this time a 10-year deal worth what is expected to be about £1.2bn with communications giant Telefonica O2.

The outsourcing firm will run and manage O2's customer service centres as well as supporting and enhancing O2's digital offering to its customers.

Price negotiations are still under way between the pair, but the deal is due to commence on 1 July this year.

Earlier this week, Capita clinched a £40m deal with the University of Strathclyde which meant the total figure attached to major new business wins for 2013 hit the £823m mark, according to its annual report.

The O2 contract, which forms an extension of the duo's long-term strategic relationship, caused some controversy as regional press reports circulated that unions have blasted O2 for transferring thousands of local call centre-based jobs to the outsourcer.

Capita was also embroiled in another dispute in Barnet after a disabled resident claimed the council did not consult on the 10-year deal with the firm, which she claims could put crucial support services she receives at risk. Barnet won the judicial review brought against it.

Paul Pindar, Capita's chief executive, said the O2 win demonstrates his company's strengths.

He said: "We will build on our existing long-term relationship with O2 through best-of-breed technology platforms which support service flexibility, quality and efficiency. Close partnership working with O2 will enable us to adapt our customer management services to seamlessly match developments in O2's service offering.

"Today's announcement demonstrates the added value we can deliver to our clients through deploying our industry-leading customer management services, capabilities and extensive operational delivery infrastructure."