People Telecom has signed a new $200 million supply agreement with Telstra Wholesale to support continuing growth in national fixed wire and broadband services.

The three year agreement was signed by People Telecom CEO, John Stanton and Telstra wholesale group managing director, Kate McKenzie.

Stanton said it follows an exhaustive competitive selection process with Australia's largest wholesale suppliers over the preceding six months.

"This agreement, combined with reduced operating costs and improved internal efficiencies we now have in place will drive improved margins in People Telecom's core services during the second half of 2007-08 and beyond," he said.

"These new arrangements with Telstra wholesale reflect the strength of our long-standing relationship and offer substantial bottom-line benefits to People Telecom and the opportunity to drive additional profitable growth in the provision of retail and wholesale telecommunications services across Australia.

"The new agreement provides additional flexibility, an improved cost-base and the ability to maintain operating margins over time.

"As such we expect the new arrangements, combined with People Telecom's internal transformation, to deliver value to our shareholders," Stanton said.

The agreement covers the provision of a wide range of fixed wire and broadband products and positions People Telecom to deliver a wider range of Telstra wholesale products during the life of the agreement.

Telstra's Kate McKenzie, said the telco's solutions and technical support are unmatched and Telstra is proud to be able to add value to People Telecom's business model.

- Sandra Rossi