Satyam loses Telstra contract

Telstra has reportedly dropped an IT outsourcing contract with Satyam, the second major Australian company to do so since the disgraced Indian outsourcer's accounting scandal came to light.

According to the Australian newspaper, the applications support contract worth $32 million annually would be picked up by EDS.

Telstra pointed to the fact that a number of its major IT contracts with EDS, IBM GS, Infosys and Satyam had come up for renewal and that it had announced its intention in November to lower the number of contractors to two.

Yet when asked whether Satyam had been outed, Telstra would not comment. "Decisions about supply arrangements with individual vendors will not be announced to the media by Telstra at this stage of the process," a spokesperson for the company told ZDNet.com.au.

This is the second major Australian contract Satyam has lost since it became embroiled in an accounting scandal because Satyam's former chairman B.Ramalinga Raju had inflated cash and bank balances by US$1.04 billion.

The National Australia Bank decided in February to suspend future work with the Indian outsourcer until the future of the company became clearer.