BBC Technology handed to Siemens for £2bn

The BBC has selected Siemens Business Services as the single preferred bidder for the £2bn IT outsourcing contract to take over BBC Technology.

IT services provider Siemens, and its 1,400 acquired staff, will provide a 10-year managed services contract for the broadcaster from this autumn.

Siemens will have responsibility for the BBC's entire broadcast engineering, satellite and desktop infrastructure, and will manage £20m in revenue from external broadcasters.

The company must also allay staff fears over leaving the BBC. The 1,400 BBC Technology employees are set to decide on Friday whether to strike over the deal.

The BBC said in a statement: "Siemens had demonstrated its ability and commitment to invest in technology services and innovation to meet the BBC's future technology requirements with significant projected annual cost savings."

The Corporation added that Siemens had fulfilled criteria including scale, resources and funding levels that fit with BBC Technology's 10-year vision.

Siemens also had the right cultural fit, ability to deliver value for money, and commitment to innovation.

BBC Technology had been part of the BBC Venture Group established in 1998 to exploit the Corporation's technology expertise.

The division is being sold in response to calls for the BBC to generate an extra £300m in cost savings. The sale is expected to create savings of £20m a year.

Following an internal strategic review into the division's future requirements, the procurement process was launched last November and attracted eight initial bidders.

The sale will now go to the BBC Board of Governors, the Department of Culture, Media and Sport and the European Commission as a public broadcasting sale for ratification before the handover this autumn.