Telecom and EDS extend outsourcing deal

Telecom has committed to a further three years with services company EDS, while selling its 10% stake in the local subsidiary of the US firm.

Telecom New Zealand and EDS New Zealand are to extend the country's largest-ever IT outsourcing agreement, but the telco will quit its stake in the service company.

The deal extends a $1.5bn 10-year service agreement, signed in 1999, by a further three years until 2012, at a cost of $280 million.

But in turn, Telecom will sell its 10% share of EDS New Zealand back to the US-owned multinational for $46 million, the original price paid in 1999.

EDS will continue to support most of Telecom's centralised and distributed computing platforms; most of its major billing and network provisioning systems; and the full range of application development and maintenance, excluding certain network-specific areas.

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