Telecom signs deal worth $150 million over five years

Telecom uses the Southern Cross Cable to defeat the 'tyranny of distance' as well as the brain drain and in doing so hopes to carve out a new market segment for itself

The tyranny of distance is dead and buried and the Southern Cross Cable has put a stake in its heart, says Investment New Zealand’s Ian Shields, speaking at a Telecom event.

Telecom’s new new advanced solutions group (ASG) has signed with EMS Global to provide round the clock support for its European expansion programme from New Zealand. The deal is worth an estimated $3 million in revenue to Telecom in the first year but the expansion plan could see that balloon to $150 million over five years.

“We hear so much about the brain drain and people leaving New Zealand to find work — it’s great to see a New Zealand company able to offer the flexibility needed for this kind of contract,” says Shields.

EMS Global is a New Zealand firm offering outsourced security solutions to a number of vertical markets including finance and health sectors. Its expansion in Europe means it needs a technology partner in Europe to look after the contact centre and take on responsibility for all help desk support and the like.

EMS Global chief executive Andrew Hannah says the company talked with a number of potential partners in Europe, but discovered it had overestimated their level of achievement. "We were working with Telecom here in New Zealand and talked to them about it and were surprised to find they could offer exactly what we were looking for right here at home,” says

Telecom’s ASG will build a new network operations facility in Auckland and is hiring around 35 staff immediately with scope to expand as EMS Global expands up to around 300.

“We’re looking for highly trained IT staff and we have no worries about finding them here in New Zealand,” says ASG general manager Chris Quin. He says while we talk about the brain drain in New Zealand and a labour shortage, in Europe the problem is far far worse.

“We do have these people coming out of tertiary institutions, it’s just a matter of identifying them.”

Telecom expects this side of its business to expand over the next five years — at the moment managed network services like this are worth around 15% of the total business but Telecom chief operating officer Kevin Stratful says that number should bloom to around 40% in the coming years.

“Most telco business is in the fixed line market — here in New Zealand that of course is free so we have to look elsewhere for our revenue stream. This kind of service will become more important as the local line becomes commoditised over the next four or five years.”

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