Gen-i shows more bottle across the Tasman

By Renai LeMay | Tuesday, January 29 2008

Gen-i is growing "aggressively" and has clinched a number of deals with large organisations but much of its success is due to Telecom NZ's relationships.

Telecom New Zealand is gaining ground in its bid to win more corporate information and communications technology services work in Australia.

The company's trans-Tasman ICT services division, Gen-i Australasia, revealed last week it had won a series of local contracts worth more than $100 million late last year.

Gen-i is one of Australia's larger IT services firms but has stayed out of the limelight when compared with high-profile rivals like IBM and EDS, and even smaller groups like SMS Management & Technology.

But the company said last week it had signed new contracts with large organisations such as the Australian Stock Exchange, NSW Police, Insurance Australia Group, Perpetual and Tattersall's in the last quarter of 2007.

In one significant deal, Aon Risk Insurance renewed its contract with Gen-i for three years, in a deal worth about $8 million but likely to grow to about $10 million in future.

The success comes after another large win in June 2007, when Commonwealth Bank of Australia renewed its long-running contract with Gen-i for managed voice and telecommunications services.

Telecom New Zealand does not disclose Gen-i's revenues but in its last quarterly earnings call said IT services revenue had grown 12.9 per cent compared with the previous year.

Gen-i's head of sales, Shane Quinn, told The Australian Financial Review the company had started to "aggressively" grow and focus on new business from the start of the new financial year in July 2007, rather than just maintaining existing contracts. "It paid off in our second quarter," he said.

He said it was this effort, in which Gen-i bulked up its staff numbers substantially, in addition to overall growth in the local corporate market for ICT services, that helped the company win the new local deals.

"We're seeing some really good growth in the market around the convergence of IT and telecommunications," he said, referring to technologies such as voice over internet protocol (VoIP) telephony.

"It's been talked about for quite a while. But now we're starting to see some really good traction, and customers getting serious about actually doing some of these projects."

Mr Quinn acknowledged that much of Gen-i's business came through the relationships that its parent Telecom New Zealand and sister company AAPT had with large corporations on both sides of the Tasman. "It's a lot easier going in, because you're familiar right away," he said.

Telecom New Zealand's $357 million buy-out of local telco PowerTel and subsequent merger of the company's operations with its local subsidiary, AAPT, had also given Gen-i a boost, because the companies are no longer so reliant on buying wholesale telecommunications services from other local telcos like Telstra.

"One of our challenges in the telco world in the past has been being quite reliant on other players," Mr Quinn said.

Fairfax Business Media