Telecom picks Visionstream

900 workers affected

TEL

2.145

-0.02

-0.69%

Click for a detailed chart

Relevant offers

Telecoms, IT & Media

EPMU prepares Visionstream campaign Welcome news as TV ad revenue increases Freeview uptake rising slowly 2degrees chief stepping down Spin muddies the waters Trade Me holds off on Google lists Eyede merger a 'smart' move Cranking up the creative juices MediaWorks reprieve on tax case Commission acts to remove barrier

Telecom is changing multi-billion dollar contracts it has with outsiders to maintain its network, creating uncertainty for about 900 workers.

Telecom's unit Chorus will sign 10-year contracts worth $3 billion next week, which provide work for existing contractors Transfield Services and Downer EDi Engineering and new entrant Visionstream. All three are Australian companies.

Visionstream will operate in Auckland and Northland.

The move changes employment arrangements as Visionstream uses a business model of owner-operators, as well as employees.

Chorus oversees more than 130,000km of copper network, 25,000km of fibre-optic cable, 637 telephone exchanges and 11,000 cabinets providing work for 2500 field service technicians.

Transfield told 460 workers today that their jobs would be disestablished. It is losing the Wellington-Horowhenua region to Downer and previously covered north and west Auckland.

Engineering, Printing and Manufacturing Union secretary Andrew Little said the changes risked destabilising the industry.

"There's still a serious skills shortage in the industry and any new contractor wouldn't be able to do this work without hundreds of workers crossing over from their current employers," he said.

He said the point of contention was likely to be the Visionstream owner-operator model.

"Our members are showing great reluctance to want to do that," he said. "Our workers are deeply anxious."

About 400 Engineering, Printing and Manufacturing Union members in Auckland and Northland were affected, he said.

Transfield said its new 10-year contract had an approximate value of $1 billion.

Chorus said the move to longer contracts would give service companies increased business certainty and confidence.

Downer will continue to manage the East Coast, lower North Island and lower South Island, while Transfield will continue to manage the central North Island and the upper South Island.

Chorus spokesman Robin Kelly said the decision on service providers followed a comprehensive contract renewal process.

The introduction of a third player was expected to result in benefits such as a diversity of providers, and in an innovative new approach to field service delivery.

Mr Kelly said Chorus would be encouraging workers in the areas where the provider was being changed to move to the new service provider.

But he pointed out that Downer and Transfield also had other businesses in Auckland and Wellington.

The changes were not about cutting costs, rather it was about reshaping the field workforce to deliver better customer services, he said.

A plan had been put in place to minimise the impact to customers during the three-month transition period.

Andrew Little of the EPMU said the New Zealand telecommunications network was delicate and investment was going into broadband.

"We already have issues with skilled labour and the investment in getting new technicians into the industry.

"A company that wants to hire a bunch of independent contractors isn't going to be investing in the next generation of technicians. I think there is some real issues here," he said.

Chorus chief executive Mark Ratcliffe said the skills and knowledge of field technicians was vital to its business, particularly with large scale programmes such as the deployment of faster broadband cabinets, and local loop unbundling under way.

Visionstream was established in 1994 as a subsidiary of Telstra and bought by Leighton Contractors as a wholly-owned subsidiary in 1996.