Post Office drops BT as phone and broadband partner

The UK’s Post Office has dropped BT as the network services provider for its home phone and broadband services.

Instead, it has signed a five-year contract with IT services provider Fujistu, which will act as service integrator to a number of subcontractors. TalkTalk will provide the network infrastructure itself; Capita will provide customer services, and specialist services provider MDS will support customer billing.

IT and telecommunicaitons service provider Fujitsu will handle the migration, both of the network infrastructure and the supporting applications. 

"The agreement provides the best solution for its increasing number of home phone and broadband users, as well as providing the best commercial opportunity for the Post Office," the organisation said in a statement.

The Post Office has resold BT Wholesale phone and broadband services since 2007, when it signed a four-year deal worth £750 million. It currently serves around 500,000 customers in the UK.

The financial terms of Fujitsu’s side of the new deal were not disclosed, but TechMarketView’s Anthony Miller estimates that the contract could "easily be worth £500 million". In a statement to the London Stock Exchange this morning, TalkTalk said it anticipated "an aggregate revenue over the 5-year term in excess of £100 million" from the contract.

Miller remarked that added that Fujitsu’s role in the deal "goes way beyond its ‘traditional’ infrastructure services support homeland".  "As prime contractor, Fujitsu will be overseeing the entire migration process, both of the network and of the applications," he wrote. "This is…a great result for Fujitsu UK&I CEO, Duncan Tait and his team."

Tait explained the structure of the project to Information Age. "It will be our guys in exchanges around the country moving [customers] from the incumbent [network to ours]," he said. "What [the Post Office] gets with us is one company accountable for the service end to end. What TalkTalk brings is the expertise about building services on top of a core infrastructure network."

TalkTalk CEO Dido Harding said the deal was "in line with our long term strategy for leveraging the scale of our network and growing TalkTalk Business".

Outsourcing services provider Capita is also involved, managing the customer contact centre for the Post Office, while MDS, a CRM supplier which specialises in communications service providers, will handle billing and settlement. 

BT was a part of the Post Office until 1981. Commenting on the Post Office’s descision, BT said that the two parties had been "unable to reach a commercial agreement" after BT gave notice on the contract in July 2011.

"The Post Office has now found an alternative supplier in what is a highly competitive market and we wish them well. BT Wholesale will continue to supply them with managed wholesale broadband and calls services until the end of the contract," BT said.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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