Telstra services buy could harm Oz services scene

Kaz for concern

By Ashlee Vance in Sydney • Get more from this author

Posted in Financial News, 6th April 2004 11:11 GMT

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Aussie giant Telstra has confirmed acquisition talks with services provider Kaz Group in a move that could be bad news for IT-hungry businesses here.

Media reports claim Telstra has offered up to AU$400m to buy Kaz, but a company spokesman said Telstra has made no decision as of yet with regard to the transaction. Rumors of the deal Tuesday forced a halt in the trading of Kaz shares.

Kaz specializes in providing a wide variety of services to corporate and government customers. Business process outsourcing, document and image processing and call centers are particular areas of strength.

Telstra would clearly be looking for Kaz to boost its own services efforts.

One close industry watcher here, who preferred not be named, warned that Telstra could ruin a good thing if it bought Kaz. The relatively small services firm has a solid reputation for keeping a close eye on customers.

Telstra, by contrast, does not enjoy the best of reputations for either consumer of business services. The telco is majority-owned by the Australian government and its size and slow moving ways could harm smaller Australian firms in need of services help, according to the Aussie pundit. ®