Ness Technologies Inc (NSTC)

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Yes canceled part of outsourcing deal with Ness, Bezeq reveals

06.3.06 | 09:03 By Eran Gabay and Galya Yemini

Satellite television provider Yes canceled part of its outsourcing contract with IT service provider Ness Technologies (Nasdaq: NSTC). The partial contract termination came to light last week when Yes' parent company, the domestic telecoms monopoly Bezeq, filed its financial report for 2005.

In March 2004, Yes signed a contract for Ness to manage all of Yes' computer systems. The eight-year contract was worth $3.5 million a year, totaling $28 million, and included an option for a possible five-year extension.

After the deal was signed, 70 Yes computer staffers were transferred to Ness Technologies.

Neither company has reported any disputes, however Bezeq's reports indicate that in 2005, they agreed Ness would stop providing Yes with outsourcing for certain information systems, which Yes would resume managing.

Haaretz has learned that some Yes employees who were transferred to the Ness payroll at the beginning of the project, have been returned to the Yes information-technology unit.

The financials also state that the parties were negotiating changes in the contract. It is still unclear how large a loss this represents for Ness, if any.

Ness is the largest computerization company in Israel. Its client list includes the First International Bank and Migdal. It refused to comment for this report, saying that it does not disclose information on clients. No response was available from Yes as of press time.

http://www.haaretz.com/hasen/spages/690726.html

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