Australia's largest telecommunications company Telstra is said to have engaged Tata Consultancy Services for outsourcing parts of its finance, accounting and voice-related back-office processes.

As part of this multi-year deal which is said to be worth over $50 million, TCS will take over 100 back positions from Telstra, sources close to the development told Business Line.

A spokesperson for TCS did not comment on the development.

Ms Karina Keisler, the Melbourne-based spokesperson of Telstra, said: “As a result of a long-standing tender, some administrative back of house functions are proposed to be performed by industry partners based overseas.

“This would affect a number of Telstra employees (about 160) and the workload of current industry partners, who currently perform the functions.”

However, Ms Keisler did not comment on which outsourcing vendors have been contracted by Telstra.

Multiple vendors

Australian news reports have suggested 300 positions (including that of Telstra and its partners) will be impacted as Telstra is planning to engage multiple vendors for its back-office work.

News reports have further suggested that IBM too has been contracted by Telstra for a piece of the back-office work.

However, this could not be independently verified as a spokesperson for IBM refused to comment on the development.

‘Project New'

The new arrangement is part of Project New, a new initiative that was launched by the A$25-billion Telstra last October with an eye on improving online customer service, simplifying prices and cutting costs. One of the early proponents of the off-shoring model, Telstra had set aside $400 million for this task.

Telstra has been steadily raising back-office sourcing from offshore firms in both India and the Philippines largely due to the scarcity of qualified technology professionals in Australia, analysts say.

Telstra's focus on off-shoring back-office work could open the Australian market for Indian vendors, especially at a time when global telecom giants such as BT and AT&T have curtailed tech spending, they say.

(This article was published on September 11, 2011)
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