Telstra slashes Brightstar deal

Telstra has sliced a large piece of the pie out of its long-running relationship with handset wholesaler Brightstar.

In 2005, Telstra inked an exclusive deal with the US company to manage its supply chain, including the provision of handsets, inventory management and retail fulfilment. Reports surfaced at the time detailing close links between Brightstar and the then-Telstra chief Sol Trujillo and chief operations officer Greg Winn.

The contract has now been reviewed. Telstra this afternoon confirmed a report by The AustralianIT that the telco had taken its handset supply needs back in-house from Brightstar a year and a half after Trujillo's departure.

"When we first entered into a contract with Brightstar, their size, scale, global sourcing experience and relationships with manufacturers offered us value," Telstra said in its statement this afternoon.

Over the years, Brightstar had delivered "significant" cost savings to the telco, access to the latest handset and internet devices at "competitive prices" and faster delivery of products to Telstra's shops, and eventually customers, the telco added.

However, Telstra's wide-ranging internal revamp, code-named Project New, is seeing all contracts with external suppliers being reviewed, which lead to the Brightstar relationship being chopped. "We have made a strategic decision that the time is right for us to bring our handset sourcing back in-house in 2011, in the current market we believe we can deliver value for our customers by negotiating directly," it said.

The telco also noted that Brightstar would "continue to be an important provider of supply chain and logistics services for Telstra". It was only in March last year that Brightstar and Telstra inked an exclusive three-year deal, which is seeing Brightstar improve the performance of Telstra's retail supply chain.