Tasmania calls up Anittel for $45m state communications deal

By Julian Bajkowski

Upstart local technology services company Anittel has scored its first substantial state government win after the Tasmania picked the company over much bigger competitors for a plum telecommunications deal worth up to $45 million over almost a decade.

In an announcement to the Australian Securities Exchange, Anittel said that it has inked an agreement to provide managed voice services to the island state's public sector using Cisco’s suite of unified communications infrastructure.

The new Tasmanian government voice services will be hosted on Anittel’s own infrastructure, a move that sets a precedent for other states to follow in terms of getting access to higher capability equipment at competitive prices.

The Tasmanian government is keen to sell the deal as a breakthrough for the state after decades of wrangling with larger providers.

“The State Government is pleased to be partnering with a company that has had a long history delivering IT and telecommunications technologies to Tasmanian businesses,” Tasmanian Premier Lara Giddings said.

“Anittel intends to create at least 10 new jobs in its Hobart and Launceston offices, with the potential to further expand their Tasmanian operations into the future.

“These jobs will be in highly skilled management, technical and support roles across the state, enhancing the diversity and capability in the local ICT industry.”

The decision by Tasmania to pick a smaller company to deliver its managed voice services is particularly significant as state governments in New South Wales, Victoria and Queensland seek to recast underperforming central procurement deals that have delivered questionable value.

An acknowledged long-term problem with central procurement deals is that while the achieve initial discounts, they also entrench an incumbent set of suppliers that have little incentive to innovate, add value or reduce prices when they are not exposed to competition.

At the same time, big telecommunications suppliers have largely stayed away from competing for individual smaller deals from regional and local governments because they are seen as hard work for skinny margins.

The retreat of larger telco players from the regions has effectively left a gap in the market for smaller agile companies with lower overheads to snap-up regional deals because they are able to value add to contracts through the provision of IT services like hosted software and cloud computing.

A number of state and local governments are counting on the rollout of the National Broadband Network to enable smaller telco and IT services providers to compete against bigger peers and great better value for taxpayers.

The promise of the NBN was not lost on Premier Giddings who sought to talk up the mammoth project.

“The Tasmanian Government needs 21st century technology to effectively connect Tasmanians to services, improve communication between agencies and prepare for the revolutionary roll-out of the NBN,” Ms Giddings said.

A key reason for the appeal of Annitel to clients is that it its senior executives have a well-established history of successfully competing against large providers on service and value and winning.

Anittel’s managing director, Peter Kazacos, is a veteran of the local technology industry having founded services company Kaz which was later sold to Telstra in 2004 for $333 million.

Many analysts regard the formation of Anittel as a kind of Kaz 2.0 that has the potential to repeat the success of the original company.

In its statement to the ASX, Annitel said that the Tasmanian deal followed a competitive tendering process.

“Key factors in the Government’s decision to award the contract to Anittel included, cost efficiency, network infrastructure, benefits of the Hosted Cisco UC Call Manager platform and Anittel’s presence and knowledge in the Tasmanian market,” the company said in its statement.

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