IBM loses Telstra contract, Infosys benefits

BANGALORE, INDIA: Australia’s leading phone company Telstra Corp has reportedly ended one of IT outsourcing contracts with IBM Corp and has given the same to Infosys Technologies Ltd.

IBM Global Services' multi-million dollar applications support contract with Telstra has been scrapped as a result of the telco reducing its outsourcing partners from four to two, ‘The Australian’ reported on Monday.

The decision to shift from IBM to Infosys could result in hundreds of job losses in IBM. IBM has major outsourcing centres in many places including Bangalore and the latest development could adversely affect these centres.

‘The Australian’ said IBM GS staff were told of the contract loss in a conference call last week. They were told the scratching of the vendor's software support would represent about 50 per cent of its $1 billion, six-year deal with Telstra, signed in early 2006.

Last week, Telstra had reportedly terminated its IT outsourcing contract with Satyam Computer Services.