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December 5, 2006

BT GS outsources maintenance to Alcatel in $692m deal

BT Global Services plans to save 100m pounds ($198m) over the next eight years, by outsourcing its equipment maintenance and spares management to Alcatel-Lucent in a 350m-pound ($692m) deal.

By CBR Staff Writer

The IT and network services division of the UK operator previously subcontracted this work to a number of different maintenance suppliers but expects to make some big cost savings by working with a single partner.

The deal is a boost for Lucent-Alcatel’s ambitions in the services sector, and will also help BT Global Services in its cost-reduction program. The company said in September 2006 that it was aiming to for annualized cost reductions of more than 400m pounds ($791m) within three years, including annualized savings of 200m pounds ($395m) from reducing its third-party procurement costs.

The global, eight-year contract covers first-line maintenance, second-, third-, and fourth-line support, and spares management.

Alcatel-Lucent have identified services as a target growth area following the completion of their $11.6bn merger last month. The Alcatel-Lucent Services division has more than 18,000 network experts supporting telecoms operators, enterprises and government agencies, in over 130 countries, with services including maintenance, consulting, network integration, and managed services.

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