Equant lights up at $144m Japan Tobacco deal

Japan Tobacco Inc (JTI), seller of the Camel, Winston and Mild 7 brands of cigarettes, is outsourcing its telecoms operations to Equant in a six-year deal worth $144m.

The agreement spans 47 countries and will see numerous contracts with local service providers move to Equant, which is a division of France Telecom, during coming months and years.

JTI, the non-Japan division of the world's third-largest tobacco business and, until 2000, the international arm of RJ Reynolds, will use IP virtual private network (VPN) technology for secure data links as well as voice over IP for telephony.

Gunter Hagendorf, director of global telecoms and networks at JTI, said: "The majority of our data services are already with Equant but the majority of our voice [contracts] have been through local agreements. Not all parts of the business will move forward at the same time."

Michel Picaud, head of Equant Global Solutions, said the contract is "one of the biggest" that the company has won. The provider is thought to have beaten off competition from AT&T, BT, Infonet and possibly others.

"We were trusted more with the IT because of our data heritage," Picaud said.

JTI's Hagendorf said the outsourcing aspect of the deal - which will see a small number of staff transfer across to Equant - was important and about reducing complexity.

He added: "We have had a mantra to source the service, not the technology."

The transformation also sees an important change in Hagendorf's role. He said that he will move from being head of the telecoms operation to being "director of the vendor relationship".