The five-year contract is worth $745 million.

Telstra has announced that it has extended its IT operations and services agreement with IBM until the year 2014. The five-year contract, which is an extension of an existing services agreement, is worth a total of AU$745 million. It will result in greater automation and improved remote management capability of Telstra's IT systems, while reducing server build time enabling the telecommunications giant to more efficiently execute complex projects across its IT infrastructure.

As Australia's leading telecommunications provider, Telstra runs the nation's largest non-government IT infrastructure. IBM builds and manages Telstra's servers, software and systems in this complex environment. As part of the new services agreement, IBM will move to improve operational delivery while simplifying and streamlining server builds for Telstra, including:

• Implementing a standard set of processes and tools across more than 3000 servers
• Adopting a "factory" approach, featuring standardized, repeatable processes, to build and configure new servers for Telstra.
• Defining standard processes, procedures, tools, forms and work products for each phase of a server build
• Implementing streamlined documentation requirements in the areas of design, approvals and changes
• Implementing a consistent server base state for application on- boarding

The streamlined approach will deploy a more consistent IT platform across the whole of Telstra's IT infrastructure, and will result in reduced costs and improved efficiencies. It will also provide increased automation of Telstra's IT systems, allowing for improved levels of monitoring, patching and remote management. Other benefits include:

• Streamlined documentation requirements
• Quicker application deployments
• More efficient execution of complex IT projects

"We have a long and proud association with IBM," said John McInerney, Telstra CIO and group managing director of IT. "We consider them to be a strategic partner and are confident that this agreement will continue to add value to Telstra's infrastructure operations and delivery."

David Burns, IBM managing director said, "This is a significant agreement for IBM as it builds on our strong relationship of more than 20 years."

"Both teams (IBM and Telstra) have collaborated closely in the design of this new agreement and we are excited to be embarking on a new way of working with Telstra," he added. "The new agreement is a great opportunity for us to build on the work we have been doing in this area, combining the IBM software tools suite and IBM's depth of technical knowledge to provide Telstra with a highly efficient IT environment." The agreement was signed in May.

About Telstra

Telstra is Australia's leading telecommunications and information services company, with one of the best known brands in the country. It offers a full range of products and services and competes in all telecommunications markets throughout Australia, providing 9.4 million fixed line services and 9.2 million mobile services. Telstra is Australia's 3G market leader, with 4.4 million 3G customers. Telstra is the second largest full-service provider in New Zealand and the leading mobile operator in Hong Kong. It has a controlling stake in China's leading real estate and home furnishing web site, SouFun and in June 2008, acquired 55% of two Chinese internet businesses, Norstar Media and Autohome/PCPop, with leading positions in the online auto and digital device advertising sectors. For more information, visit http://www.telstra.com.au/abouttelstra/media.

About IBM

For more information about IBM, visit http://www.ibm.com/services.