O2 has signed a 10-year deal with Capita, worth approximately £1.2 billion, to outsource responsibility for customer contact centres in Leeds, Glasgow, Preston Brook and Bury.

The news follows intense negotiations with Union members, where threats of industrial action finally resulted in an agreement that gave the 3,000 staff transferring to Capita better protection on pay, pensions and terms and conditions. This agreement includes a two year job guarantee.

The Communications Union (CWU) agreement document states: "CWU National Team believes that the intensive negotiations that have taken place over the past few weeks have concluded in a package of protection and assurances that are the best that can be achieved through negotiation."

However, O2 will be offering some 1,000 staff voluntary redundancy as a result of the deal.

Capita will run and manage O2's customer service centres and also support O2's attempts to enhance and expand its digital service offering to customers.

In other outsourcing news, the Cabinet Office recently struck a deal with Capita to set up a joint venture business based on the government's 'Best Management Practice' portfolio of professional standards that has been developed by the Civil Service.