TelstraClear gets into IT services

Telecom services empire will have competition from an old adversary

Following unsuccessful negotiations to acquire Gen-i and possibly other IT integrators, TelstraClear has bitten the bullet and gone to the market with its own ICT business group, relying for the present on existing internal resources.

TesltraClear has been providing IT services for many years, says Ken Goodwin, head of the new unit. Managed data services, web development, web hosting and contact centre solutions have been particular areas of expertise and the company runs three datacentres, whose clients include the TAB and insurance company IAG NZ.

Now, however, the ICT group has been established as “a separate P&L centre”, Goodwin says. While it could easily be seen as a “me too” exercise, following Telecom’s acquisition of Gen-i and Computerland, there are sound reasons for the move, which he says has been part of the company’s strategy for about two years.

Convergence is a fact of the ICT business, with IP networks assuming a central role in both computing and telecommunications. But from a commercial point of view, the two areas of activity do not fit logically too closely together in one unit, Goodwin says. Telecommunications is about investing in network infrastructure and ensuring a return on it by providing standardised services; IT is about individual projects for particular customers. They require a different style of operation and financial management.

There is customer demand for a one-stop shop for IT and telecommunications services, especially in the converged IT framework; one company able to provide both can exploit certain economies, such as helpdesk services, for “more aggressive pricing”.

The ICT business group will build on the company’s existing skills in the IT area, Goodwin says. “Our priority is in emerging technologies and the real opportunities that convergence presents; we’re not into becoming a desktop IT supplier” — a reference to Telecom’s recent Computerland acquisition.

The existing business in wide area network support will be extended into customers’ LANs, and security has been identified as another potentially hot market area. But pressed to be more specific under that general heading, Goodwin acknowledges that it is simply a “loose observation” at the moment and a specific plan of attack has not been firmed up.

The new unit is initially 60 strong, drawn entirely from internal staff, but it has been advertising for a small number of new recruits. In the future, there are clearly three available strategies to acquire new expertise: partnering, growing internal skills or acquisition, Goodwin says.

The IT services industry is ripe for further consolidation, he says, but he will not speculate on potential targets. “The media keeps saying we’re planning to acquire Axon. I have no comment.”