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Author: Katharina Grimme
T-Systems announced yesterday at the IFA consumer electronics fair in Berlin that it is extending and expanding its existing outsourcing contracts with T-Mobile for a further seven and a half years. T-Systems will assume responsibility for IT operations and will also harmonise the IT and service landscapes of T-Mobile's five European operations (Germany, Austria, the UK, Netherlands and the Czech Republic). T-Systems will provide high-performance network infrastructures and operate computing centres, hardware parks, and databases, including business applications. Furthermore, the ICT service provider will manage all PC workstations and associated IT service processes. But T-Mobile will retain responsibility for all IT applications.
In addition to IT services, T-Mobile operations in Austria and the Czech Republic are outsourcing billing management for 9m customers to T-Systems. T-Systems is already providing this service for T-Mobile in Germany and the Netherlands.
The overall volume of the renewal has not been made public, but T-Systems says that it is worth €1bn more than the previous contract.
Comment: This is an essential renewal for T-Systems, and a clear statement that it is still the provider-of-choice for its parent organisation. While most captives experience declining revenues from their parents, it is remarkable that T-Systems has managed to increase contract volumes. This is similar to SBS, which was given responsibility for Siemens' overall IT infrastructure last year.
With this deal, T-Systems can further strengthen its international presence, as well as its position as a billing business process management (BPO) provider. Most importantly, it will have to illustrate that it can provide the same level and quality of service across several geographies, and that it can achieve cost reduction and efficiency objectives for T-Mobile through effective consolidation.
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