Telecom must be free to outsource, user group says

Telecom should be free to outsource jobs overseas if that helps it compete in the market, the Telecommunications Users Association says.

Chief executive Ernie Newman said that although New Zealanders might "sentimentally" want as many jobs as possible to be in this country, Telecom was an important part of the supply chain for thousands of businesses.

"They have to be given the freedom to do what they have to do to compete."

His comments come after reports that Telecom is considering proposals from seven companies for changes that could result in hundreds of jobs going overseas.

An industry source said the jobs that could go generally paid more than $100,000 a year and were mainly in Wellington, Christchurch and Hamilton.

In Hamilton, up to 60 jobs could go at contractor Gen-i.

Sources said Telecom had been discussing outsourcing work for some time. Discussions had centred on helpdesk work, and they were surprised by the news.

Leaked documents show that one of the least radical options, put forward by Hewlett-Packard, could lead to 400 to 500 jobs being axed.

Labour MP Clare Curran said she had been told that 400 to 1500 jobs could go.

Telecom said the figures were wildly speculative. Chris Quin, chief executive of Telecom's IT subsidiary Gen-i, was reported by the National Business Review yesterday as saying the reports were factually incorrect.

Mr Quin said a contract held by HP/EDS for in-house IT work had expired and a new contractor was being sought. Seven companies, including IBM and Tech Mahindra, in India, had submitted white papers. The new contractor might carry out some work overseas, but that would be work now done by HP/EDS.

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