Set Outsourcing Precedent

By JENNIFER L. SCHENKER

STOCKHOLM-Setting a precedent that could impact telecoms operators, equipment suppliers and users across Europe, the Swedish government has chosen France's Transpac to supply it with data communications services.

The government also plans next year to outsource its voice traffic, which last year totaled about $180 million.

The data contract marks the first time a European government has ceded control of its domestic communications to a foreign carrier.

In Europe, where national ties among operators, manufacturers and governments have closed markets to outsiders, the Swedish move could signal the start of real competition.

"It will be beneficial] not only for customers but also for operators, which must get used to facing real competition in their own market so they will be better prepared to be out in the world, " said Helena Lindskog, technical director with the pro- curement arm of the Swedish government. "It is also good for manufacturers because it is breaking the traditional alliances of operators and manufacturers

on a national basis. "

The contract is also likely to force more cost-based pricing. Transpac's bid price was 32 percent lower than Televerket's and 21 percent lower than BT's. The three operators were judged to be equal on quality of service.

"I'm surprised, given the cost situation, that somebody could provide service at such a price, " said Bjorn Norrbom, president of Televerket Megacom AB, set up by the Swedish public operator to service the country's 100 largest customers. Megacom's tender included data offerings from global network outsourcing company Unisource.

Norrbom said the Swedish government's choice of Transpac will spur his company to lower costs and improve service. But he said Megacom expects the same opportunities to bid for government contracts in France and the United Kingdom.

Under terms of the eight-year Swedish contract, each govern- ment agency is free to choose an- other supplier if it is not satisfied with Transpac service.

Transpac, which last year acquired X.25 and Systems Net- work Architecture networks in Sweden, also has networks in five other European countries.

Communications Week International,

1993, May