Kicking Telstra out: Optus wins mobile deal with NSW Govt



news The NSW Government today revealed it had picked Optus as its new provider of managed mobility services for a centralised contract with its Department of Finance and Services, in a move which will see the SingTel subsidiary take over a sizable body of work previously provided by Telstra.

Minister for Finance and Services, Andrew Constance said in a statement that cost-effective mobile services were vital to support the increasing mobility of public servants.

“The structure of services and pricing in the contract mean the service will be significantly simplified and service costs will be reduced by up to a massive 50 per cent,” the Minister said. “The new contract will also lead to better connectivity and mobility for agency staff.”

“More agencies are using smartphones and tablets to allow their staff to work anywhere and anytime. This enhances customer service and drives productivity. The NSW Government is committed to greater agility in our workforce and the services it provides, which is why an uncomplicated and transparent agreement is absolutely essential.”

Constance said the new contract would support the use of smartphones, tablets and laptops to offer an agile approach to service delivery and improved business outcomes within the State overnment. “The new arrangement includes the option of a significantly reduced fixed monthly fee for all local, national, mobile and SMS services. This removes the complexity of having to select the most economical plan across a diverse workforce,” he added.

The majority of these services were previously provided by Telstra, according to the Department. The new agreement will initially be used by the Department of Finance and Services and Government agencies supported by ServiceFirst. However, wll NSW government agencies can access services as part of the new agreement. The agreement has commenced and will be reviewed in 2015.

In a separate statement, Optus’ Business division welcomed the announcement, noting that under the agreement, it would make helpdesk, mobile device management, mobile voice and mobile data services available to agencies supported by ServiceFirst, the multi-tenanted shared service provider within NSW Government.

John Paitaridis, Managing Director, Optus Business said of the news: “This is a major milestone for Optus and an opportunity for both parties to secure cost savings and productivity gains in Government telecommunications services. We see today’s announcement as a vote of confidence in Optus’ ability to deliver a complete mobility service to large, complex organisations. We look forward to working with DFS and agencies supported by ServiceFirst on new, innovative mobility solutions that will assist it in achieving its aim of improving customer centric government service delivery.”

The news comes several weeks after an audit of three of the Victorian Government’s largest agencies found that none can be confident that they are effectively managing their spend on telecommunications services.

Great to see Optus winning this kind of business with large organisations away from Telstra. As I wrote several months ago:

“Although some telcos such as Optus, AAPT, Macquarie Telecom and others have taken some of this work away from Telstra over the years (such as this $500 million deal which ANZ Bank signed with Optus back in 2009), the honest truth is that many current and former government entities in Australia have been contracting their telecommunications services to Telstra for decades, and there isn’t much end in sight. I often see these deals go out to tender, and then I often see Telstra returned as the supplier of choice.

Part of this is a logical technical decision. For large Australian organisations, Telstra can still provide the most comprehensive and technically sound telecommunications service in Australia. It just has a bigger network, with more resources, and it’s invested in that network more than other telcos have been able to. I personally, right now, buy all my business telecommunications services from Telstra, because my office can get Telstra HFC cable (but not Optus) and I need the best and most reliable 4G mobile broadband access, which also comes from Telstra. I’ve used iiNet a lot in the past for ADSL broadband.

But part of the situation is also inertia. Competition in business telecoms in Australia isn’t terrible; but it also takes a hell of a lot of effort to switch suppliers. For organisations which have been using Telstra for decades, switching to a rival firm probably looks like a lot more effort than it’s worth. So they put contracts out to tender, but eventually Telstra wins, and things stay as they are.

This is the advantage of incumbency. Telstra’s massive existing relationships with large organisations around Australia give it a huge advantage over rivals, when it comes to business telecommunications services. To beat Telstra, the likes of Optus and Macquarie Telecom have to show that they’re significantly better, because Telstra often has the advantage of having been in the account for decades. There was a time, after all, and it wasn’t too long ago, when the staff of Telstra and Tabcorp were all just happy government public servants together.”

Looks like Optus Business is starting to make some headway against Telstra in major government contracts — which can only be a good thing for competition in general. When it comes to mobile, we need a strong Optus to keep Telstra honest. It would also be good to have a strong Vodafone, but let’s be realistic — that’s not going to happen right now.


  1. I think it’s a good thing. Now, if only Optus could really get some more reliable coverage at 4G speeds, and I’ll be happy.

    Vodafone need to do the same. Invest in making their network as strong as possible, but that will take time as well.

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