Telstra, Woolworths in talks over telecomms contract

Woolworths moves to 'whole of business' contract

Telstra and Woolworths are allegedly in discussions over a large telecommunications contract previously handled by the telco but about to be awarded to IBM, according to an internal source.

Computerworld Australia understands that under the whole of business contract IBM would be responsible for managing Woolworths' telecommunications services across all subsidiaries including Big W, Dan Murphy's, and Dick Smith. Telstra scored a five-year telecommunications contract in 2003 with Woolworths to supply voice and data services for about 1500 sites across Australia and New Zealand.

IBM signed a five-year contract with Woolworths in 2004 to supply and maintain some 130,000 hardware components including printers, cash registers and radio frequency devices across its supermarkets.

Telstra and Woolworths would not confirm the deal or be drawn on the details of the discussions; however the contract has been "a done deal" for two weeks, and triggered Telstra to consider legal action, according to the source. IBM New Zealand's head of marketing and communications, Courtney Allen, says IBM "doesn't comment on rumour and speculation so we've got no comment to make".

A Woolworths spokesman said the company undertakes "periodic reviews of service providers" but would not say if the Telstra contract had been snapped up by IBM nor confirm discussions with service providers.

"We are currently reviewing our telecommunications requirements, but we do not provide running commentary on the tender process," he said.

The source said Woolworths had put the February contract announcement "on ice" following discussions with Telstra.

A Telstra spokesman said he "could not discuss the contract as a service provider".

IBM is said to be preparing to increase its technical support staff to cater for the Woolworths deal, however the company had not responded by the time of publication.

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Tags Telstra. woolworths

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