NTL outsources IT operations to IBM

UK cable operator NTL will transfer 600 IT staff to IBM under an outsourcing deal expected to save hundreds of millions of pounds over the next eight years.

The agreement, to be signed in April, is an extension of a 10-year contract that IBM signed with Cable & Wireless Communications (CWC) in September 1998. NTL completed its acquisition of CWC in May last year.

Under the terms of the deal, the value of which has yet to be disclosed, Big Blue will provide IT services for NTL's operations in the UK and Ireland until 2008. NTL's 600 IT staff will be offered jobs at IBM.

Peter Black, chief technology officer at NTL, said: "We anticipate that this alliance will deliver significant cash savings of approximately £300m over the life of the contract and improve service levels."

NTL, which expects to see the savings begin towards the end of the year after the contract has been signed, said the alliance will enable it to improve the speeds at which it delivers new products and services to the marketplace.

The operator stressed that it will retain control of its IT activities that are "key to the development of its intellectual property".

A spokeswoman said: "We have made 11 acquisitions of other cable companies over the past 18 months and have inherited number of legacy IT systems. This is a good option for us to integrate systems with one outsourcing contract."

Big Blue will provide general IT support to NTL such as software development and maintenance, IT products and technical support for NTL employees.