Tesco signs Cable & Wireless in £100 million IT deal

Tesco today announced it had signed a five-year, 100-million outsourcing deal to consolidate and modernise its IT network infrastructure.

The deal will streamline existing telecommunications systems of the retail group's UK and international operations into a more cost-effective and efficient, single internet protocol (IP) network, delivering 40 times its current capacity.

Nick Folkes, Tesco UK infrastructure and operations IT director, told IT PRO the deal would allow it to consolidate communications over multiple, legacy voice and data networks onto one.

"The rationale for doing [the deal] is for its financial benefits," he said. "But at the same time, increased investment will allow us to get more value out of the network."

He said a key reason why Tesco chose Cable & Wireless as its exclusive supplier of data, fixed and mobile voice telecommunications after a yearlong, 14 party tender process was the added functionality the provider's Multi Service Platform (MSP) could offer.

Folkes also cited fixed-mobile convergence (FMC), a Cable & Wireless UK service, as an important enabler of more efficient voice communications between Tesco staff. Using existing mobile phones for all calls - operating as a fixed line phone in the office and roaming on to a mobile network when outside - will allow staff to get directly through to colleagues even on the shopfloor.

"This convergence allows for a greater penetration of mobile telephony solutions, where otherwise, we'd have to manage contracts, tariffs and coverage," Folkes said. "By using pico cells to create a mini GSM network, we can now feasibly deploy mobile handsets and deploy the services on top, basically for free."

Cable & Wireless will implement a voice over internet protocol (VoIP) platform on the network, which will significantly reduce Tesco's voice and data call costs, as well as introduce the FMC service for Tesco employees.

The new network will connect more than 1,800 Tesco sites including stores, regional offices and distribution centres. Internationally, the network will directly connect Tesco's operations in 14 countries including China, India, Japan, the US, Republic of Ireland and Turkey in an aggressive 18-month roll out.

Folkes added that the new network will also allow for the use of innovative communication tools to improve operations and add to the customer experience, such as telepresence - a video-conferencing facility that will be enabled by Cisco high-definition video conferencing technology. "We couldn't hope to do telepresence with the existing network," he said.

Other new network capabilities will include in-store information kiosks for customers, IP broadcasts of staff training, development and management information and international office access to centralised management systems.