Post Office selects Fujitsu in '£500m' broadband deal

By Sooraj Shah
25 May 2012 View Comments
Post Office

The Post Office has selected Fujitsu to provide next-generation broadband to its customers in a deal that analyst firm TechMarketView says could be worth up to £500m.

The five-year contract will see Fujitsu take over about half a million current subscribers to the Post Office services and replace BT and Logica among others as the supplier of its home phone and broadband deal. BT Wholesale had struck a £750m four-year agreement with the Post Office for broadband services in 2007.

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The contract will be shared with Fujitsu's call centre arm Capita, billing systems specialists MDS and TalkTalk.

Duncan Tait, Fujitsu's UK and Ireland CEO, told Computing that the partnership will enable the Post Office to realise its strategy of being a standalone company to serve local communities while being profitable.

"We hope to enable them to allow the Post Office to make more money by growing its subscriber base and therefore revenue," he said.

TalkTalk's share of the deal is expected to be £100m and Tait clarified how the broadband provider fits in to the contract.

"Fujitsu is the overall integrator above TalkTalk. What TalkTalk brings on top of the physical infrastructure is the broadband services, and other new service enhancements they have such as TV, which enhances the package that the Post Office can make to the consumers.

"Capita is providing the customer service on the front end," he added.

Tait went on to suggest the deal sits in line with Fujitsu's own strategy.

"We are known as a services company in the UK and we are gaining share in our technology business, so we are a technology company as well. But the third leg in our business is our networking capabilities, which puts us in a really differentiated part of the market.

"It allows us to compete where telcos and IT services companies have struggled, so this [deal with the Post Office] is part of a wider strategy we put into place two years ago, which is showing a real benefit for us," he added.

TechMarketView's managing partner Anthony Miller agreed with Tait's views.

"Fujitsu's role goes way beyond its ‘traditional' infrastructure services support homeland. As prime contractor, Fujitsu will be overseeing the entire migration process, both of the network and of the applications.

"This is real ‘up the value chain' work and very strategic for Fujitsu. So, a great result for Fujitsu, and undoubted angst in the corridors of Holborn and Kings Place [head offices of BT and Logica respectively]," he said.

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