Updated: Telstra scales down Brightstar relationship

Updated: Telstra scales down Brightstar relationship

Long-term relationship reviewed as part of Telstra’s internal restructure

Telstra (ASX:TLS) has downgraded its long-term relationship with US-based distributor, Brightstar, following a review of their exclusive partnership agreement.

Brightstar was charged with the distribution of mobile devices at a retail and enterprise level for the telco. The deal was originally signed when former Telstra CEO, Sol Trujillo, was still in power.

In 2005, there were rumblings that the agreement was based on a close relationship between the then CEOs of the companies. However, the telco said Brightstar was chosen for its size, global sourcing experience and relationship with manufacturers.

But the agreement has been trimmed since it was reviewed as part of an internal restructuring plan dubbed Project New.

“[We] have made a strategic decision that the time is right for us to bring our handset sourcing back in-house in 2011,” Telstra said in a statement. This is effective from March 2011.

“In the current market, we believe we can deliver value for our customers by negotiating directly.”

Telstra maintains Brightstar is a valued provider of supply chain and logistic services for the company.

According to the distributor, it was consulted throughout the process leading up to the decision.

“Brightstar continues to be a key partner to Telstra, delivering Supply Chain Optimisation services for mobile and wireless devices across Telstra’s Consumer, Business, Enterprise and Government operations,” a Brightstar spokesperson, said.

This development will not affect the distribution deal between UC vendor, Mitel, and Brightstar in June. The agreement was based on Brightstar’s close relationship with Telstra.

"Brightstar is a valued distribution partner for Mitel, and we continue to work closely with them in the Australian market," Mitel vice president for Asia-Pacific, Gwilym Funnell, said.

"It is business as usual. Brightstar distribute the complete range of our solutions, and work closely with many of our Australian channel partners to win new business."

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