The agreement, signed today, covers the provision of Information Technology (IT) services for NTL across the UK and Ireland.

The strategic alliance will generate significant competitive edge and increased stakeholder value for NTL through the delivery of state-of-the-art technology, a menu of support services and significant cost savings. The agreement reached today has a potential value in excess of US $2 billion over its term.

NTL and IBM have adopted an innovative menu-driven approach to all services to be rendered, with prices regularly benchmarked against best-in-class peers. This structure is projected to generate savings for NTL in excess of US $450m over the life of the agreement, and will allow NTL to size its IT needs and resources dynamically to generate further savings and/or competitive advantage over time.

With immediate effect, 483 IT staff will transfer from NTL to IBM to coincide with the start of the service.

Under the proposed agreement, IBM will provide IT services for all of NTL’s operations in the UK and Ireland until 2012. However, NTL retains control of its IT activities which are fundamental to its competitive advantage.

Stephen Carter, Managing Director, NTL UK and Ireland, said: This significant agreement is more good news for NTL stakeholders. It frees us from the day-to-day IT demands so that we can focus on delivering great service and innovative communications solutions for our customers, while remaining confident that our non-core IT requirements are in the hands of experts.

Tony Cronin, Vice President, IBM Strategic Outsourcing, said: This is an exciting alliance which will help NTL accelerate the integration of the companies it has acquired over the last 18 months. We will provide NTL with robust and reliable IT systems to support its fast growing business. At the same time we will help them gain real competitive advantage through capability enhancement, efficiency improvements, standardisation and cost reduction.

Today’s agreement follows the signing of the Memorandum of Understanding, announced on January 11, 2001.