IBM is in negotiations to retain a multi-million pound outsourcing contract with NTL, after the cable operator completes its £8.2 billion acquisition of Cable and Wireless' consumer Internet, TV and telephone businesses.
A year ago, IBM Global Services signed a 10 year, £1.8 billion contract with CWC to become its chief technology service provider; a mega-deal which accounts for the lion's share of CWC's £333 million annual IT spend (see Newswire 3 September, 1998).
Big Blue hopes to keep a foot in both camps by retaining outsourcing relationships with both operators, following CWC's decision to offload its consumer arm to NTL in favour of focusing on higher value corporate business (see Newswire 26 July).
While the terms of CWC outsourcing agreement do not compel NTL to work with IBM, CWC chief information officer Andy MacLeod said future technology arrangements would, "almost certainly involve IBM on both sides."
IBM was holding ongoing discussions with NTL and "ideally" hoped to have a deal hammered out by the time the acquisition went through, IBM Global Services vice president Bill Kleinhofer said.
IBM hoped to agree roughly similar terms and conditions with NTL as it currently enjoys with CWC, he said.
Both IBM and CWC declined to speculate what percentage of the CWC outsourcing contract the consumer arm was likely to account for.
MacLeod said this would be dependent on the way CWC and NTL chose to split infrastructure such as databases, billing systems and employee records software.
All hardware used by CWC is owned by IBM.
Some CWC customers have claimed that, despite IBM's promised revamp of the billing system, nearly a year on CWC's billing services have not improved.
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