Telstra’s $90 million phone bill

Telstra has lost millions of dollars on its deal with the Department of Human Services (DHS) to operate its call centre. The $474 million deal granting Telstra control over Centrelink’s phone lines has cost the telecom giant more than it expected, according to Fairfax.

The current deficit is purported to be up to $90 million, and with at least two more years left of the agreement, Telstra is set to lose millions more. According to Fairfax, Telstra lost $30 million per year for the first two years of the contract, with this figure expected to continue rising at a similar or greater rate for the foreseeable future.

However, Telstra isn’t the only one losing out. Callers to Centrelink have been subjected to a worsening service ever since Telstra took over the contract in June 2012. In 2013-14, Australians spent a total of 143 years waiting to speak to Centrelink before giving up. Additionally, Telstra’s shareholders have also been kept in the dark about the losses.

However, suggestions have been made that criticism of Telstra is unjust, since the phone company may simply be willing to absorb the contract’s initial fallout in order to guarantee ongoing future projects with the government.

Telstra competed with rivals Optus, Dimension Data and NEC in 2012 to seal the deal, which at the time, became one of the Commonwealth’s biggest IT contracts.

The five-year deal includes two, one-year extension clauses, and will eventually lead to Telstra’s management of all of the DHS’s telephone, data and call centre services. The deal is supposed to simplify DHS services by connecting Medicare, Centrelink and Child Support. It is also supposed to provide valuable services for several thousand staff across more than national 855 sites.

Read more at Sydney Morning Herald.

Amelia Theodorakis
Amelia Theodorakis
A writer and communications specialist with eight years’ in startups, SMEs, not-for-profits and corporates. Interests and expertise in gender studies, history, finance, banking, human interest, literature and poetry.
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