update Telecom New Zealand subsidiary Gen-i has taken itself out of the running for the Commonwealth Bank's tender process to provide the bank with Australia-wide telecommunications services.
Chris Quin, CEO for Gen-i Australasia
The bank confirmed last month that it had put out a request for proposals for telecommunications services, seeking a partner for a 10-year deal which could be worth AU$1.3 billion. Gen-i is currently under contract to provide the bank's voice and data services until February 2009, which brought in AU$113 million during the year of 2007, according to the Commonwealth Bank's 2007 results presentation.
Gen-i's decision comes in the wake of a strategic revamp, which will see the company move away from telecommunications to focus on managed ICT services. The spotlight will now be on the mid-market, particularly trans-Tasman businesses.
Chris Quin, CEO for Gen-i Australasia told ZDNet.com.au that because of the scale of the bank, the company wouldn't be able to transfer the capability the contract developed to other deals. "They generally don't share infrastructure with the rest of the market," he said. "They have unique requirements for security and up-time."
He added that the margins on enterprise of that size are slender, while the investment to participate in the tender process and meet the organisation's needs was considerable. "All the large enterprises are very, very competitive," he said, adding that such deals most likely suited the large Australian telco.
However, Gen-i's relationship was far from over with the bank, Quin said, with Gen-i likely to work for the next 18 months or so on transitioning the bank's voice and data services to the next supplier as well as still having contracts for the bank's call centres and wide area network up until 2013.
The type of deal that Gen-i will be fishing for in the future will be similar to its converged IT and technology services deal with engineering company Norfolk Group, which it announced earlier this month, according to Quin. More, smaller, high margin deals would help the company to grow, he said.
The company has invested heavily in service management and will spread itself over a wide capability of providing IT support infrastructure and networking for customers as well as managing telecommunications. Quin saw the company working a lot with Citrix and Microsoft doing desktop support and applications packaging.
Quin said Gen-i's competitors will be of the ilk of IT services providers Datacom and Data#3. However, in focusing on the trans-Tasman market, Quin believed that Gen-i has found a niche, servicing companies that need the same service in Australia and New Zealand.