Capita signs 10 year deal with O2 worth £1.2bn

OUTSOURCING company Capita signed a £1.2bn contract to run O2’s call centres yesterday, weeks after agreement was reached with unions over terms for workers who will transfer to the firm.

Under the 10-year deal, 2,700 advisers based at four sites across the UK were transferred to Capita’s management from 1 July.

The Communication Workers Union balloted for strike action June but later called it off after reaching a deal with Telefonica UK, known in Britain as O2, on workers’ conditions, including a two-year job guarantee.

O2 opened a voluntary redundancy programme for around 1,000 of its employees at Leeds, Glasgow, Preston Brook and Bury shortly after Capita was announced as preferred bidder in May.

Spokespeople for both O2 and Capita said that there was no plan to close sites.

Capita, Britain’s largest outsourcing company by market value, upped its organic revenue growth forecasts to at least eight per cent for 2013 when it first announced the deal.

“O2 is a brand renowned for its innovative and bold approach to delivering services and, as a result, has a loyal customer base,” Paul Pindar, chief executive at Capita, said at the time.

“Capita will design an enhanced service around customers’ evolving needs, introduce new capabilities quickly and ensure that customers’ experiences continue to be excellent.”

Shares in the company hit a record high in May thanks to large contract wins in the public and private sectors. They closed up a further 1.3 per cent yesterday at 994p, valuing the firms at around £6.4bn.