TELSTRA'S long-suffering involvement with the IT services arena is almost at an end, with the telco expected to sell the final remnant of its Kaz services business in the near future.
It is understood Telstra is engaged in discussions with an international IT services firm to buy the remainder of Kaz, which was bought by the telco for $333 million in 2004, but in more recent times has been carved up and sold off piecemeal.
The deal is expected to be finalised by the end of the financial year, but a source close to the negotiations said: "I can't see it going past a month."
Over the past year, Telstra conducted a lengthy review of its Kaz business and chief executive Sol Trujillo has made it clear the business is not necessarily considered as core for the company's future.
Early last year, Telstra removed responsibility for its big four accounts from Kaz, which includes NAB, Woolworths, Westpac and Qantas. These are now managed in Telstra's enterprise and government group.
This coincided with the jobs of 650 Kaz staff being shifted to within Telstra.
Telstra is understood to have been in discussions with prospective Kaz acquirers for the past couple of months, but as these talks entered the formal stages, negotiations hung on the issue of price.
The telco is understood to be pushing for a purchase price around the $100 million mark, which would allow it to recoup its original investment in Kaz. Hewlett-Packard, IBM and Fujitsu have all been rumoured as potential bidders for Kaz.
Telstra has realised about $230 million from slicing parts of Kaz over the past couple of years, including $215 million when it sold superannuation processing subsidiary AAS in 2006.
Telstra was unavailable for comment yesterday.
AustralianIT Mahesh Sharma | February 21, 2008
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