Camelot comes under fire for Global Crossing deal

National lottery operator Camelot has been criticised for signing a seven-year multimillion-pound contract for ISDN services with...

National lottery operator Camelot has been criticised for signing a seven-year multimillion-pound contract for ISDN services with an arm of troubled telecoms giant Global Crossing.

An auction of Global Crossing non-core assets - of which the UK managed services operation is part - is due later this month as the telecoms firm tries to gather the funds to restructure.

Mike Mikklelsen, head of the Communications Management Association's risk and continuity special interest group, reacted to news of the deal with dismay.

"That such a large, well-known UK company should, at this juncture, commit to an organisation which appears not to have secured financial underwriting should give some concern to a government which gains revenue from its operations," Mikklelsen said.

"Serious consideration should be given to putting the deal on hold until financial underwriting is in place for Global Crossing's UK operations," he added.

US-based multinational telecoms firm Global Crossing filed for chapter 11 bankruptcy protection in January. From a peak market capitalisation of $48bn (£32bn), its assets were recently valued at $1.25bn.

The seven-year Camelot deal will see ISDN network provision rolled out to 25,000 lottery retailers. It will replace networks largely based on X.25 - a technology in place since the 1970s - satellite-based VSat and some packet radio.

According to Global Crossing project director John Birring, ISDN has now reached the stage of being a mainstream technology while X.25 has been increasing in price as support costs rise while service levels have fallen.

Analysts have been advising businesses to develop a portfolio of telecoms suppliers. Iain Stevenson of analyst firm Ovum, said, "The key thing in the current climate is to keep options open - businesses need to have diversity of supply."

A Camelot spokesperson said, "We are satisfied that there are adequate contingency plans in place regarding the Global Crossing situation."

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