BT's quarterly newsletter for industry analysts 
BT signs major deal with KCOM
On June 22nd BT signed a strategic agreement with the KCOM Group - a leading provider of communications solutions to businesses and public sector organisations throughout the UK.
The agreement will enable KCOM to extend its network reach through access to BT's national network, outsourcing the management of its network assets to BT Wholesale. The deal represents the largest networking outsourcing contract BT Wholesale has signed so far.
According to BT Wholesale chief executive Sally Davis, the agreement is one of the most exciting developments to happen in the UK fixed line communications market for some time.
Davis said: "This agreement allows KCOM's business to benefit from BT's national reach as well as our significant ongoing investments in 21st century network infrastructure and next generation product and service developments."
She added: "We are delighted that KCOM has chosen BT and look forward to working together to build a strong and lasting relationship."
Through its agreement with BT, KCOM will reduce the ongoing fixed costs and capital expenditure associated with the management of its network infrastructure. KCOM says the retention of its existing fibre access network - coupled with access to BT's network scale and service capability - will position the KCOM Group strongly in the provision of communications services to its target markets.
Network management handover
As part of the agreement, there will be a phased and controlled outsource of the management of KCOM's UK network operations to BT over the next few years, with the initial stage of this work being completed in September. BT will manage, maintain and enhance network operations, network management and vendor management on KCOM's behalf, allowing KCOM to focus on meeting the needs of its customers.
Bill Halbert, KCOM Group deputy executive chairman, said: "This agreement is an important step in the transformation of the KCOM Group. It will allow us to reduce our fixed costs and capital expenditure significantly, while strengthening our competitive position and ability to grow. In addition to creating a more variable cost model, it gives us the ability to offer more extensive and competitive carrier and managed communications services and new next generation propositions to our customers."
Under the contract BT will provide a range of services to KCOM including network operations, field engineering, vendor management and network management. In addition, BT is providing some sales and marketing support and new product development.
The deal with KCOM is further evidence of BT Wholesale's strength in delivering managed network solutions. Over the last 12 months, BT Wholesale has won managed network solutions contracts to the value of £1.2 billion.