Australia’s second largest telecommunication company Optus is believed to have dished out a technology offshoring contract to Tech Mahindra with an eye on cutting costs.
Sources, who do not wish to be identified, classify this deal in the ‘mid-size’ category with a revenue potential of up to $20 million for Tech Mahindra.
Tech Mahindra is expected to provide systems integration, infrastructure management services and a small chunk of back-office outsourcing as part of the arrangement.
“Staff in Optus’ IT division was advised in February of plans to outsource some local IT functions to third party vendors. Following a review of our IT division, we have identified around 130 roles that are affected by the expansion of our offshoring capabilities,” a spokesperson for Optus said, without confirming the names of contracted third party vendors.
Optus, which is a wholly owned subsidiary of Singapore Telecom, suffered a 7.5 per cent slump in net profit to $728 million in the year to March. as revenue declined. “We are working with employees who are affected by these changes, and where possible, we are exploring redeployment opportunities for our people,” the spokesperson added.
In reply to a Business Line questionnaire seeking more details of the tie-up, a Tech Mahindra spokesperson said: “Because of (a) non-disclosure agreement with Optus, we will not be able to share the details asked below”. According to a report on arnnet.com, the 130 IT roles will be outsourced to vendors Accenture, Tech Mahindra and and SingTel's IT subsidiary Optus-NCS.
The move is said to be part of Optus’ three-prong strategy of reducing costs and boosting profitability by outsourcing jobs, increasing the number of services customers can access via the Internet and making its distribution network more efficient. News reports in the Australian media suggest that Optus has cut over 1,300 jobs in the last two years.
adith.charlie@thehindu.co.in