Absa Taps Telkom for $237M VPN Contract

August 7, 2008

Absa, the country's biggest retail bank and Telkom, Africa's largest integrated communications company have signed a five year contract for the provision of an integrated end-to-network solution that will connect more than 2,548 Absa sites across the country. The deal's worth is estimated at R1, 7 billion.

Telkom cites this deal, that bolsters the Company's core strategy of defending and growing revenues, as one of the largest ever concluded with a corporate customer. The agreement also bears testimony to Telkom's ability to align its core competencies with the drivers of customer value.

Telkom's Chief Executive Officer, Reuben September, says that the Company's ubiquitous network, and network management capabilities, enable the delivery of value-added data managed services at speeds and quality levels that outshines competitors.

"The Absa contract is further validation of our success in winning large corporate accounts. It attests to the depth of our technology and project management skills," says September. "This contract confirms our consistent progress up the ICT value chain through providing higher level products and services."

Ian Russell, Absa's Chief Administration Officer says the revamp of its information technology system will contribute to the maintenance of its business leadership position.

"This is an integral aspect of modernizing the Group's internal information technology systems and keeping abreast with industry developments. We have to maintain our leadership position and continue to efficiently deliver customer-centric solutions to our client base. Without continuously upgrading our system, this cannot be possible."

"In the past 24 months we conducted internal investigations into the operations of our current Wide Area Network and concluded that it needed a revamp. This project will facilitate the expansion of branches, enable real time connectivity and provide redundancy in the event of disaster by using Telkom's Multi Protocol Label Switching solutions." The WAN will also allow for data transfer and interconnection between Absa's branch networks, ATM networks and Information Technology (IT) data centre.

VPN Supreme, which underpins this contract, is Telkom's flagship Virtual Private Network product on Telkom's integrated, multi-service NGN architecture.

"We are in the third year of our NGN build-out programme. The NGN enables us to satisfy customer demands for bandwidth-hungry applications while reducing network operating and capital costs and meeting global standards," says September.

Ian Russell affirmed: "This is not a cost-cutting exercise but a process aimed at further improving our efficiency levels. We do not anticipate job losses as a consequence of this process."