CBA's $1b telco deal not expected until new year

It will be at least another three months until the Commonwealth Bank's much anticipated $1 billion telecommunications outsourcing contract is announced.

Russell Scrimshaw, CBA's head of technology, operations and property said the chosen supplier would not be made public until after January next year.

"It will be into the new year with the intention of deploying the relationship before the end of the financial year," he said.

A "smallish" number of suppliers have been shortlisted for the contract, which Scrimshaw expects to generate cost savings of at least 20 per cent.

"I think we expect to get some fairly significant [cost savings] of the same order we've had from IT. My minimum expectation would be 20 per cent plus," he said.

"We expect to improve service levels. We expect to get some synergy from the partner around a whole different range of value added services especially in the internet space."

Scrimshaw said the bank is looking for a "single manager of [its] telecommunications resource" who is capable of providing e-commerce and internet services as well as traditional telephony services.

Internet initiatives at CBA include customer facing services and intranet based applications, Scrimshaw said.

He said the decision to have a single manager will not rule out the possibility of multiple service providers.

"There will be only one organisation managing the whole relationship . . . If they chose to buy services from others, that's really going to be up to them," he said.

CBA's current major telecommunications suppliers include Telstra, Optus and Vodafone, Scrimshaw said.

"Over time, because we've stayed with them, we've obviously been comfortable with where we're at," he said.

"But now that we are rebuilding the environment towards an all internet environment and that the market's changing so rapidly following deregulation, and with the deployment of new technologies, we really think we would be much better of with a single point of accountability."

CBA currently outsources its IT services to EDS in a 10-year, $5 billion agreement.

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More about Commonwealth Bank of AustraliaCommonwealth Bank of AustraliaEDS AustraliaOptusTelstra CorporationVodafone

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