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Govt rings $12m mobile phone bill savings in three-way deal

BUSINESSDESK: The government has cut $12 million a year from its mobile phone bill after tying up the three major players in a public sector-wide deal.

Telecom's Gen-I, Vodafone New Zealand and Two Degrees Mobile have signed up to an all-of-government procurement contract that will reduce bill for mobile voice and data services by $60m over the next five years, Economic Development Minister Steven Joyce said.

"We are continuing to show the substantial negotiating power of government when procuring for all-of-government services," he said.

"Mobile voice and data services are a significant cost for government so these new contacts are a great result."

The new procurement agreements across the entire public sector have achieved annual cost reductions of some $23m for the office equipment and passenger vehicle procurement, $18m from the legal advice and $10m from air travel.

Mr Joyce said the latest contract will take total savings to some $350m.

The Government Procurement Reform Programme, managed by the Ministry of Economic Development with the Department of Internal Affairs, is also developing contracts for banking services, energy management, advertising, travel management and recruitment.

The recruitment tender is looking to trim $69m a year from the government's annual $230m spend on recruitment agencies.

Comments and questions

When is Auckland Super City going to deliver such savings from economies of scale? They need to stop spending on non core services and not just bill ratepayers for every whim!!

How can they when the Sper City is spending $500m on IT
What a joke
if something smells fishy it is fishy

The government is getting excited about these savings? Its just normal business practice to go out and source the best deals possible, well for most businesses anyway

AB - it maybe normal business practice but no one has done it before.

While 'normal', it is a significant undertaking for an entity the size of the Govt so they should be congratulated for undertaking it and reaping the benefits.

Add to that; we have political leadership with real private sector credentials who can talk the language business owners understand and respect.

Harvey, should actually be easier for an organisation the size of the Government to throw their size around and demand exceptional rates on everything from cellphones to A4 paper

Chicken feed.

Good job.

I agree with you AB. This is why I laugh about all this spin that is put on "sustainable" business practices etc.Looking at the office energy bill , for example ,should occur every month when the bills arrive. Building "sustainable" / "green" buildings is just common sense and should be viewed as that --cost control and nothing else.

This is procurement policy 101 and should be 'business as usual' not seen as extraordinary. That said it's a good step!

Like, asking us to admire the parsley, rather than the actual dish.

$12 million a year?
So what is this as a percentage?
That would give us a far better idea of how well Steven Joyce has done.
What is the annual mobile calls bill should have been the first question to ask.
Or is government keeping its mobile calls bill a secret?

Sounds like a three way handshake.

wow...who else, pray tell were the geniuses going to buy from????