Telstra leads $1.3bn CBA race

The nation's largest telco Telstra has emerged as the clear front runner in the race to win Commonwealth Bank of Australia's 10-year, $1.3 billion telecommunications outsourcing deal.

ZDNet.com.au expects the bank to finalise the contract with Telstra in the next few weeks, with some in the industry flagging 6 April as the likely date for the deal — likely to be Australia's largest corporate telco contract in 2009 — to be signed.

CBA has remained tight-lipped on the deal's outcome, with a spokesperson today again insisting that "all major telco providers, including Telstra" remain involved in the request for proposal (RFP).

"The CBA's RFP for telecommunication services is progressing well with the group currently in commercial negotiations. The details will be announced when the terms are finalised, which will be soon," a CBA spokesperson said.

The transition from CBA's incumbent telco partner, Telecom New Zealand subsidiary Gen-i, is likely to be a lengthy process. The majority of the existing contract with Gen-i ended in February 2009, however other components will remain in place for two more years.

"Irrespective of the outcome of the commercial negotiations, Gen-i will continue to be a strategic telecommunications supplier to the group," said the spokesperson.

Both Telstra and Optus have refused to comment on the outcome of the bids. Optus also declined to respond to speculation it had outlaid a significant amount on bidding for the work.

Last July Gen-i chief Chris Quinn said it had pulled out of the race because margins on such deals were slim, and probably better suited to a larger provider.

At CBA's half-year earnings announcement in February it reported slashing its telecommunications bill by $13 million, from $92 million in the previous half year to $79 million this half.

The news would be a major boon for Telstra, which has recently lost the chance to several major contracts including the $4.7 billion National Broadband Network deal and the Australian Taxation Office's managed network services deal.