Royal Mail is planning to consolidate and transform its telecoms infrastructure to cut costs and improve flexibility.

The organisation has started a procurement process for the provision and management of its existing telecommunications services, and will examine how to transform its network, including the production and distribution of digital audio-visual content via media such as IPTV.

Royal Mail says the network services, including voice, data, fixed and mobile, must be able to meet its future requirements.

The 10-year contract will be worth about £65m and will also include provision of its call centre infrastructure.

Datamonitor analyst Alex Kwiatkowski says Royal Mail is looking to adopt IP technology.

‘By consolidating and transforming its voice and data infrastructure, it can reduce its network management costs,’ he said. ‘Adopting technology such as IPTV can also provide productivity as well as cost savings through schemes such as video conferencing. It is about making the most of its existing system to improve customer service.’

A 10-year contract is not common, but suggests the organisation is investing significantly to ensure the project is done properly. This is particularly important as Royal Mail is a large business with more than 14,000 post offices, says Kwiatkowski.

The firm has overhauled resource planning and business intelligence systems and introduced RFID and mobile devices in recent years, contributing to the turning of daily losses of £1m into earnings of £2m.